International business strategy and markets

1. Analysis of the current situation of Creo Company Overview

Creo Medical operates in the highly competitive medical devices industry. Here the company primarily utilized electrosurgical products that are provide a distinct competitive advantage for the company. Here, the company leverages electrosurgical products to help save time and costs while also improving patient outcomes. Here, the company has patented its CROMA Advanced Energy Platform. This platform is used to deliver radiofrequency energy through a single access point with the body. This innovation allows medical professionals to delivery a much more precise surgical option for patients. This energy allows patients to cut, coagulate and ablate for a range of electrosurgical devices more precisely. This is unique within the industry as the technology is patented and is proprietary. In addition, the team is comprised heavily of innovative individuals who can properly leverage future medical advances to further innovate the overall product portfolio.

The company is currently undergoing rapid growth within its industry. This growth is due in part to numerous tailwinds which are impacting the industry overall. For one, countries continue to spend a larger portion of their overall GDP on medical and healthcare costs. In the United States for example, nearly 18% of the country’s GDP is spent on healthcare expenditures. These expenditures are expected to rise to 20% by the year 2030. The higher expenditures themselves are a result of an aging population worldwide and higher input costs. Again, within the United States, inflation has increased by nearly 7%. This rise in costs will inevitably be transferred to consumers in through higher product costs. In these instances, the Creo company can benefit by transferring all these increased costs to consumers through its product offerings.

The company also has a very scalable business model which can be deployed through international markets. Here, many developed markets including Europe, Japan, Australia, and Korea can each benefit from the Creo company product portfolio. Not only does each region have an aging population, but each region is heavily engaged within the healthcare sector to improve overall healthcare outcomes. This provides a large and growth target market for each product with the Creo company portfolio. As the industry for the companies’ electrosurgical products is young, there is a very large growth trajectory for the company’s products.

1.1 The company\'s current international market position

The current international market position of the company is relatively small. In 2020, the company did acquire an international competitor to boost its overall product offerings within the Asian market. However, as a very young company founded in 2003, the firm has a very small market share position worldwide. The industry overall however is very fragmented with no competitor commanding a disproportionate market share as compared to others.

1.2 Analysis of the company\'s internal environment (SWOT)

Strengths

· Highly innovative culture

· Highly motivated and well-trained workforce

· Large industry potential

· Products that are “sticky” with few substitutes in the marketplace

· Entrepreneurial and experienced leadership team

Weaknesses

· Small company with less access to capital in the marketplace

· Unproven product portfolio for certain innovations in the marketplace

· Inability to fend off larger competitors who could enter the market with much more financial backing

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Opportunities

· Future acquisitions

· International expansion

· Equity capital or debt capital raise to expand R&D.

Threats

· Large competitors

· Further innovations that make the company’s existing portfolio obsolete

· Expiration of patents

· Loss of key personnel or leadership within the organization

· Heavy regulation that can inhibit the company from entering other markets

· Trade disputes that can raise the cost of manufacturing, research, and development.

1.3 Analysis of the external environment of the company

Political – The political environment can have a very large impact on the overall performance of the company, particularly as it plans to expand overseas. Politics can inhibit growth as countries may favor their domestic companies over foreign competitors. In addition, political disputes can also cause prices to rise due to trade tensions or other import restrictions. Finally, the political environment can simply go against the overall values of the organization. For example, some foreign companies

Economic – The economic environment is very favorable to the organization. Here the products provided by the company are not subject to pricing pressures. Medical staff and organizations are willing to pay premium prices for medical products as they prefer quality overall price. Likewise, governments heavily subsidize medical costs adding further ability

Social – The social environment is relative neutral for the company. Here, medical device and service companies are viewed positively around that world and often do not garner any social ill-will.

Technological – The technological environment has a very large impact on the company, its products, and its growth rate. Here, the company relies heavily on innovation to stay competitive within the marketplace. Likewise, technological advances can make products obsolete relatively quickly.

Legal – The legal environment for the company is very important. Here legal liability can harm the company for certain defects within its service offerings. Likewise, the legal environment can harm the company’s ability to merge or acquire competitors.

Environmental – Environmental factors are relative weak for the company. Here, its processes do not adversely impact the environment in any material manner.

Porters 5 Forces – From the perspective of Porters five forces the power of suppliers is relatively low. Here the company manufactures many of its products internally for quality control purposes. The largest variable would therefore be commodity suppliers who determine their prices based on supply and demand dynamics. The power of competition in the industry is relative moderate as the product category is relatively new. However, new entrants can easily enter the market once patents and other protective measures expire. Here, the threat of new entrants, with more financial backing entering the market is high. The power of customers is relatively low as they are not price sensitive as it relates to the products being offered. In addition, governments also subsidize a portion of healthcare expenditures thus providing more pricing power to industry participants. Finally, the threat of substitutes is high considering the rapid change and technological development occurring within the industry.

1.4 Analysis of the Status Quo of Global Expansion Scope

As it relates to the global expansion scope, the ability to growth international is relatively difficult in certain circumstances. As noted above, the regulatory environment can vary significantly, hindering global expansion efforts. For example, China has very restrictive expansion polices as it relates to industries that are deemed “critical” to the country. Here, in many instances, foreign firms must have a Chinese partner if they are to do business within the country. In addition, intellectual property, in certain instances must be shared, thus inhibiting the competitive advantage of the firm. Other countries such as Europe and the United States are much more accommodative in their global expansion scope and allow capital to freely flow across borders.