¶ … U.S. Medical Technology Industry's Interest in Japan Market share and sustainable growth are the primarily interests the United States has in Japan. With its aging population and subsequently higher medical costs the U.S. intends to position itself as a worldwide power within the medical technology arena. With only marginal growth in the past, the U.S. medical technology industry needed to acquire a viable option that would provide sustainable long-term growth. Japan was a prime target due in part to its lagging and outdated medical technology and stagnant economic growth prospects. In addition, the Japanese medical technology market is the second largest market in the world with sales of roughly $15 Billion. Even more intriguing is that rapid growth of 11% annually in Japan. By positioning itself within the Japanese market, the United States could provide Japan with a broad away of medical devices that would better service the Japanese community. Concurrently, by servicing the Japanese market more effectively, the U.S. medical technology sector would utilize excess earnings to provide more effective product offerings in the future.

In addition to market share, creating universally accepted principles and guidelines were critical to future business success. By creating a heightened sense of importance of medical device standards, the U.S. could more readily sale its high end brands and services. Although more expensive, these U.S. brands could better serve Japanese constituents and all stakeholders involved. By heightening universal medical device standards, the Japanese market was also protecting itself from predatory pricing schemes. Often times, especially within business, companies tend to lower prices in an attempt to eliminate threatening competition. Through these pricing strategies, they aim to lower the price below competitors cost of production in hopes they will eventually become bankrupt or exit the market. These practices, although...

By elevating standards, companies are forced to provide minimum product specifications that ultimately benefit the consumer. This tactic is especially advantageous to the United States because it eliminates potential competition who have the intention of providing low cost yet low quality services.
Finally the U.S. wanted to change the pricing and organizational structure of Japan within its medical device industry. The Japan Ministry of Health and Welfare's (MHW) primary goal was to protect domestic interests. It believed the best way to accomplish such a task was through long approval times, imposing regulatory constraints such as the "Good Import Practices"(GIP), and a system that favored generic pricing. Although on the surface, these practices seemed to favor Japanese citizens, they actually hurt the development of the industry. First, by favoring generic pricing, Japan was essentially eliminating company's incentive to innovate. Companies didn't need to provide innovative products if the MHW was going to need allow they to receive comparable profits from their endeavors. Likewise, the overall medical industry will lag behind the world due to lack of innovative products and incentive for foreign direct investment within the country. Similarly, due to extensive approval times, the few innovations that did occur would be rendered obsolete once the approval process was complete. Through proper education and negotiation the U.S. hoped to systematicly integrate pricing controls and import requirements to benefit all parties involved.

1. b) Briefly describe the U.S. Medical Technology Industry's negotiation strategy with Japan

Both the American Chamber of Commerce in Japan (ACCJ) and the Health Industry Manufacturers Association (HIMA) were instrumental in the success of the negotiations.…