Wednesday, February 26, 2014

Mindray Medical International Limited: Going Global from China

CHATTOPADHYAY Amitava, ZHOU Dongsheng, WAN Fang
©2014 INSEAD Case Study
Mindray Medical International Limited, China's second largest medical device manufacturer, had global sales of 2.23 billion RMB in 2007. Since 2002, it had launched between seven and nine new products every year across four product lines: Patient Monitoring & Life Support products, the In-Vitro Diagnostic Products, Medical Imaging Systems and Veterinary. In 2006, Mindray’s American depositary shares (ADS) were listed on the New York Stock Exchange. By the end of 2007, Mindray had sold medical devices to over 37,500 hospitals and clinics in China. It had 12 international offices and its products were sold in more than 140 countries. However, the company’s US performance had not lived up to expectations. Founder and chairman, Hang Xu, had been approached by a leading investment bank to discuss the potential acquisition of Datascope, a mid-sized American producer of medical devices for the global marketplace. What should he do?

Pedagogical Objectives: The objective is to expose participants to the strategies of an emerging market multinational (EMNC) in developing a global branded business. The case highlights the importance of investing in "frugal R&D" if an EMNC aspires to become a branded player and showcases the key elements of Mindray's frugal R&D strategy. It also offers an opportunity to discuss the make or buy option when it comes to brand building with the possibility to buy US based Datascope. Should Mindray buy Datascope or go it alone in the quest to build a global branded business?