Stem Cell Ready
MBAB 5P21 BUSINESS STRATEGY
Instructor: Dr. P. Yannopoulos
October 23, 2013
I. Porter’s Five Forces
1. Potential development of substitute products and services:
The threat of substitute products is low because there are few companies offering similar product and service in the market. The major substitute products and services are traditional pet surgery by veterinarians. However, the traditional treatments are less effective than stem cell therapy.
2. Rivalry among competing firms: Medium （加拿大low，美国high）
There are no domestic rivals in Canada. Yet there are 6 competitors in the Unite State; two of them are major which are Vet Stem and MediVet. TheVet Stem provides services to Canadian pet owners but the animal’s adipose tissue (fat) must be sent to San Diego.
3. Potential entry of new competitors:Low
Stem cell technology is based on biotechnology and medical science. Because of the high requirement of technology, the barrier of new entry is high.
4. Bargaining power of suppliers: Low
The main suppliers are manufacturers of machine, medical detectorand medical consumablewhich have low bargaining power.
5. Bargaining power of consumers: Low
The bargaining power of buyers is low because the product and service are rare and differentiated. Customers are not buying in volume.
II. External analysis
Based on internet investigation, the Canadian government supports the application of stem cell therapy treatment. Furthermore, Canada became the first approved stem cell therapies country all around the world. More specifically, anAmerican pharmaceutical company Osirisannounced that Health Canada had approved the use of the company's Prochymaldrug for acute graft-versus-hostdisease (GvHD)therapy. As a result,Prochymal became the first approved treatment of acuteGvHD drugs in the world. Furthermore, in the early of September 2013,Toronto St. Michael'sHospitalannounced that the world's first clinical trial has been treatedby using stem cells to repair damaged heart muscle after a major heart attack. Canada has a great environment of developing stem cell therapy for both people and animals.
Because of the geographic advantages of Canada and US,both Canadian and American companies can share resource, technologies and opportunities across boundaries. Forinstance, Osiris Company is a drug manufacturer in America and received market authorization from Canada to sell cell stem drugs to Canada. This historic development of Osiris represents the world's first approval of the use of stems cell products.
Over all, from apolitical point of view, Canada's policy is very suitable and supportable for Stem cell therapy, not only for animals but also for human beings.
From a perspective of global view, although there was a financial crisis in the past few years, most of the economic uncertainty has been eliminated andthe economic trend will become better. U.S. and Europeangovernment took measures to reduce unemployment and create more job opportunities. The Consumer Price Index of US increases during the last few months. As a consequence, consumer purchasing power is higher than before and they have more disposable income.The overall global economy becomes better.
From a perspective of Canadian view, according to LONG-TERM ECONOMIC (FORECAST TD September 25, 2013), the economic growth rate of Canada is below 2.0% in 2012 and 2013, and it will accelerate to 2.4% in 2014 and 2.6% in 2015. For the household sector, Canadian economy is expected to grow by 2.3% in the upcoming five years. However, some investigations show that the Canadian government has high public debt levels and economy will re-enter a recession in 2013. Even that, according to a new study of Business Development Bank of Canada, Canadians consume consumption level will keep high on health and locally made products. Overall, because of the increase of disposable income, Canadians…