Examine the external and internal environments faced by MicroPort Scientific in 2011.
MP (MicroPort) is a medical device developer and producer and it operates its business mainly in coronary stent industry based in China. The macro-environment consists of six dimensions (appendix 1.1). Speaking generally, China has a relatively stable political situation and economic growth. However, government's policies intend to reduce the retail price coronary stent intermittently. This could impair profit margins and subsequently impose innovation pressures to players in the industry. Furthermore, as Chinese produced stents are recognized by users gradually, Chinese firms instead of foreign giants tend to be benefited. Moreover, culture in China determines that bribery could still be prevalent to some extent. Technological changes matter to this industry. Rapidly developing technologies could exert pressures continuously to stents producers' innovation and competitiveness. Additionally, laws related to business affairs like restrictions on merge, acquisition and strategic alliance, and laws protecting labors and customers are valid.
More importantly, laws that chastise bribery and protect intellectual rights which could influence the industry significantly would either become sophisticated and sound or remain unchanged.
After examining the macro-environment for the entire industry, the next step is to assess the circumstance at industrial level by using five forces analysis (appendix 1.2). The environments are never static, so both short term situations and long term trends will be illustrated. Firstly, this industry inherently has high technological and intelligent requirements, and economy of scale is necessary to leverage high R&D expense and equipment investment. It is also difficult to get access to distribution channels and to obtain production permit from government. In the long-run, the basic requirements are still high to potential entrants. Therefore, the entry barrier is high, in other words, the threat of new entrants is relatively low at present and in the future.