Organization is Key In addition to having the right people in Asia, the organization and reportin

Organization is Key

In addition to having the right people in Asia, the organization and reporting structures of the regional office need to be correct and workable. For example, it may be fine to have a regional hub for your Asian activities in Singapore or Hong Kong covering the non-Japan Asian markets. However, having your Japanese subsidiary report to Hong Kong or Singapore may be awkward, as device companies’ sales in Japan often dwarf sales in non-Japan Asia. In addition, such a setup may insult your Japanese team, which may prefer to report to the Western headquarters directly.

Most successful medical device companies have a separate Asia business (non-Japan) that reports to headquarters and a separate Japanese office that reports to headquarters on its own.

While the orthopedic sector in Asia is growing at 15 percent per year, this does not mean all Western orthopedic companies that set up in Asia will experience 15 percent growth. If the right employees and organizational structure are not in place, some orthopedic companies may grow less than 15 percent in Asia while others with the right foundation may grow at higher than 20 percent and increase their market share.

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Asia will continue to lead the world’s growth over the next 20 years. Whether Western device companies maximize their opportunities in the region will be a function of understanding the key points outlined in this article.

Reference:

1. USITC Medical Devices and Equipment: Competitive Conditions Affecting U.S. Trade in Japan and Other Principal Foreign Markets. and U.S. Department of Commerce Medical Device Industry Assessment Updated March 24, 2010.