Case Scenario : 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 U.S. (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 the above Case Scenario ) What incentives does CI have to use an international strategy?
A) increased market size
B) greater returns on investments in analytical processes
C) competitive advantage through location
D) increased market size, greater returns on investments, and competitive advantage through location.

Question

Quizplus · Accepted Answer

CI has incentives to use an international strategy because it can lead to increased market size, greater returns on investments in analytical processes, and competitive advantage through location. With a global strategy, CI can expand its reach and tap into new markets and customers, which can lead to increased revenue and profitability. Additionally, by leveraging its strengths and capabilities across markets, CI can achieve greater returns on investments in analytical processes. Finally, by strategically locating its operations, CI can gain a competitive advantage by being closer to customers, suppliers, and regulatory agencies, and by tailoring its services to meet the specific needs of each market.