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Traditional Chinese medicine injection enterprises innovation strategy

Author: LiuBaiYang
Tutor: WangJiaQiong
School: Capital University of Economics
Course: Business Administration
Keywords: Traditional Chinese Medicine Injections Modernization Innovation Strategy Core Competence
Type: Master's thesis
Year: 2014
Downloads: 3
Quote: 0
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As one of the signs of traditional Chinese medicines’ modernization,traditional Chinese medicine injections("TCMI") are widely used inclinical inpatient care after60years of development. According toindustry forces’ prediction, the annual output of Chinese medicineinjections industry has risen to50billion yuan. This injection whichowned35.5%market share has become the best-selling formulation amongall kinds of Chinese medicines, and the data is far beyond numeroustraditional forms, such as pill, tablet and capsule.However, behind the unprecedentedly prosperity market of traditionalChinese medicine injections, what has been widely criticized is adversedrug reaction. Also, in2012, the National Adverse Drug Reaction TestingCenter received a total of103,000reports about14categories’ adversedrug reactions which caused by traditional Chinese medicine injections,up58.2percent, of which have more than5,500serious reports.Throughout the development of the global pharmaceutical industry, theworld-class companies all take technology as its core competitiveness.This paper analyzes current injection’s corporations from a strategicpoint of view, and analyzes the characteristics of traditional Chinesemedicine injection industry as well as competitive advantage of thesecompanies through the classic strategic theory such as PETS analysis,Porter’s Five Forces Model. It means that the main factors of success incontemporary furious competition are supportive policies, uniqueopportunities and the benefits’ chain which brought about by fragilehigh-priced products. Undoubtedly, this reflects a lacking of innovationability based on the product itself which every pharmaceutical companyneed to have, and it’s also the basis of our strategies’ development.In the implementation process of innovative strategies whichformulated by Chinese medicine injection’s corporations, this paperproposes two different strategic points from product chain and managementchain. Innovative strategy of management analyzes the relationshipsamong high prevalence of employee mobility,"person-post match" and corporate strategy which are common in most corporations. This paper alsocreatively puts forward to the "talent evaluation index" to evaluatetalents in comprehensive, multi-angle, high-level, wide areas’ way,which could ensure that the talent assessment can be objective,scientifical, visible, quantifiable, so that it can guides the company’shuman resources strategy. Afterwards, this paper draws up differentstrategic positioning and management planning for senior executives,professional and technical personnel, marketing personnel and productionline personnel. Meanwhile, according to Ronald H. Coase’s transactioncost theory, this paper puts forward to a theory named"project managementas the core" which aim at the reengineering of organizational structureand process optimization.In the product chain, this paper proposes core technology strategyto ensure Chinese medicine injections’ validity and safety throughconducting the research of" Evidence Based Medicine of TCMI" and"Pharmaceutical Economics of TCMI", so as to establish technicalstandards of products and lead the development of the industry in bestway. It’s significant for every companies to hold together for thepurpose of creating a strategic alliance to solve the high research anddevelopment costs problem. In addition, this paper also innovativelyanalyzes problems which related to production, quality, sales and putsforward to effective innovation strategies.Based on this, this paper borrows experiences from the "Chinainnovation index"system and the general international index evaluationmethod, then establishes the "innovatively strategic development indexof Chinese injection’s corporations", which also be known as the KPIinnovation index of enterprises’ core competitiveness. It inspectscorporations’ performance on innovation strategies from four dimensionswhich including "basic elements, research investment, research output,business efficiency".

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