pakistan (local) vs. eu expansion opportunities and ...328579/fulltext01.pdf · localization and...

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Ali, Muhammad

Faisal

Localization and Internationalization Case study

Pakistan (Local) vs. EU expansion opportunities and barriers for

NATA Surgical International.

Term

D Paper

Termin: 10-05-18

Handledare: Karin Brunsson

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Abstract:

Surgical instruments are being in use to serve human healthcare for centuries. Pakistan is one of

the major countries in the world that is manufacturing and exporting hand-held quality surgical

instruments throughout the world. Pakistan exports almost 50% of its produced quantity of

surgical instruments to Europe and 25% to USA. In our research project we are conducting

research on a small company of Pakistan. The name of the company is NATA Surgical

International. The company is a small business entity located at Sialkot, a city of Pakistan. It is

working with local suppliers, who export the surgical instruments to foreign countries. NATA

Surgical International desires to remove this middle man barrier and wants to reach the

customers directly. NATA Surgical International is looking for two opportunities; either they

should start supplying surgical instruments directly to domestic hospitals or start exporting

surgical instruments to foreign countries. A research was carried out by the NATA management

who identified that 50% of its surgical instruments are directly exported to Europe from

Pakistan. With the help of these statistics, we on behalf of NATA Surgical International try to

investigate on the two different markets. This research explore the opportunities for NATA

Surgical International to either expand its sales further within the domestic market, by selling

directly to dealers, or in the European market. We investigate the best markets within the

European countries, as well as study domestic opportunities and barriers.

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Acknowledgements

First we would like to thank NATA Surgical International for their cooperation with in regard to

this research project and for making their data available to us. We also want to thank our

supervisor Karin Brunsson for the support and guidance while writing the thesis and our dear

friend Omar and others for reading the report through for typos. Last but not the least we want to

thank our parents for their blessings, good advice and for just always being there for us as a rock

solid support.

Ali, Muhammad.

Faisal

Karlstad, 2010-05-19

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Table of Contents

1. INTRODUCTION ............................................................................................................................................. 6

RESEARCH PURPOSE ........................................................................................................................................................ 7

DATA COLLECTION METHODS ............................................................................................................................................ 7

LIMITATION ................................................................................................................................................................... 8

2. BACKGROUND ............................................................................................................................................... 9

WORLD SURGICAL INSTRUMENT INDUSTRY BRIEF OVERVIEW ................................................................................................... 9

THE PAKISTANI SURGICAL INDUSTRY OVERVIEW .................................................................................................................. 10

History ................................................................................................................................................................. 10

Key facts and figures of the Pakistani surgical industry ...................................................................................... 10

Top importing countries of surgical instruments from Pakistan ......................................................................... 11

How a SME (small and medium sized) exports surgical instruments from Sialkot, Pakistan .............................. 11

COMPANY BACKGROUND ............................................................................................................................................... 12

Company Mission ................................................................................................................................................ 12

Current company situation ................................................................................................................................. 13

SWOT Analysis of NATA ...................................................................................................................................... 14

COMPETITION IN THE SURGICAL INSTRUMENT INDUSTRY:...................................................................................................... 14

Key success factors of Pakistani surgical instruments manufacturers: .............................................................. 14

Areas to improve for Pakistani surgical instrument manufacturers: .................................................................. 14

3. CRITERIA FOR THE SELECTION OF MARKET(S) .............................................................................................. 15

CRITERIA OF MARKET SELECTION IS AS FOLLOWS; ................................................................................................................ 16

REASONS BEHIND THE SELECTION OF FACTORS: ................................................................................................................... 16

REASONS BEHIND THE ALLOCATION OF SCORES TO THE FACTORS: ........................................................................................... 16

Market size: (30 score) ........................................................................................................................................ 17

Economic development: (40 score) ..................................................................................................................... 17

Growth / Decline: (30 score) ............................................................................................................................... 17

SCORING SCALE FOR THE SURGICAL POTENTIAL COUNTRIES .................................................................................................... 17

4. CASE STUDY ................................................................................................................................................. 19

OVERVIEW OF PAKISTAN ................................................................................................................................................ 19

How hospitals purchase surgical instruments in Pakistan .................................................................................. 19

Problems that can cause difficulties to work locally ........................................................................................... 19

Criteria study ....................................................................................................................................................... 20

Summary of Pakistan score: ................................................................................................................................ 21

OVERVIEW OF EUROPE .................................................................................................................................................. 22

EU relationship with Pakistan ............................................................................................................................. 22

Trade rules and regulation of EU ........................................................................................................................ 22

Statistics of imports of surgical instrument in EU countries for the last 5 years from Pakistan: ........................ 23

European countries explanation according to the criteria of selection: ............................................................. 24

5. EVALUATION OF CASE: ................................................................................................................................ 47

LOCAL EXPANSION: ................................................................................................................................................. 47

EUROPE:..................................................................................................................................................................... 48

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High potential countries: ..................................................................................................................................... 48

Moderate potential countries: ............................................................................................................................ 48

Average potential countries: ............................................................................................................................... 48

Low potential countries: ..................................................................................................................................... 49

THE EVALUATION OF THE COUNTRIES IS AS FOLLOWS; ................................................................................................ 49

Requirement for export of surgical instruments: ................................................................................................ 49

Competition in Europe: ....................................................................................................................................... 50

CONCLUSION: ...................................................................................................................................................... 51

RECOMMENDATIONS: ......................................................................................................................................... 52

FURTHER STUDIES: ....................................................................................................................................................... 53

REFERENCES:........................................................................................................................................................ 54

APPENDIX: ........................................................................................................................................................... 57

(A) EU MARKET SIZE: ........................................................................................................................................... 57

(B) EU ECONOMIC FACTORS: .................................................................................................................................. 58

(C) EU GROWTH / DECLINE AND FINAL STATUS ......................................................................................................... 59

(D) INTERVIEW WITH NATA COMPANY MANAGER: ..................................................................................................... 60

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1. Introduction

A total overview of the report is given in this first chapter of the thesis. A brief

introduction to surgical instruments is given and our method of working is told.

Surgical instruments are such fine instruments, which all are individually crafted by experts.

Nowadays production relies more on machines than handcrafting, but the finishing of the

production is still done with hands by specialists having many years of experience in this

particular field. The design of the instruments has not changed over the years, because it works

fine just the way it is and always has been (Saborsky, 2007). Surgical instruments are now the

part of major export commodities of many countries. Today in this complex and challenging

world the all the business across all countries is being integrated more rapidly into each other‟s

markets as compared to the past. According to what Mitrof (1987) said, “All business today is

global. Those individual business, firms, industries and whole societies that clearly understand

the new rules of doing business in a world economy will prosper; those that do not will perish.”

The motivators behind this market integration are specialized in production knowledge and

economies of scale. Along with large multinationals from developed world some small

multinational enterprises from developed and developing countries are reaping the benefits of

globalization.

In the developing economies the SMEs (Small and Medium Enterprises) are major contributors

and are the backbone of every country‟s economy. As stated by Czinkota & Ronkainen (2007)

the growth of global business activities offers increased opportunities at different markets. Also,

market saturation can be avoided by becoming global and not just sticking to a domestic level.

But at the same time international opportunities require careful exploration because it can lead to

both profit and loss. Most managers believe that international operations are only carried out by

large multinational corporations due to high risk of competition and challenges. However smaller

firms are major players too. For example 50 % of German exports are created by firms with 19

or fewer employees. Furthermore 97% of US exporters are small and medium sized enterprises

with two-third of US exports, with less than 20 employees in each firm (Czinkota & Ronkainen,

2007). According to Czinkota & Ronkainen (2007), the firm who is not participating in the world

market has to recognize that in today‟s trade environment, isolation has become impossible.

Even if not by choice, most firms and individuals are affected directly or indirectly by economic

and political developments that occur in the international marketplace. Those firms who do not

participate in the global marketplace are not ready for harsh competition from abroad (Czinkota

& Ronkainen, 2007 pp 10-11).

Our thesis shows a comparison of local and international expansion of a small surgical

instrument manufacturing company named NATA. NATA is a company from Pakistan, which is

well known for manufacturing quality hand-held surgical instruments. The USA and Western

Europe is the big market for Pakistan made surgical instruments. USA imports more disposable

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instruments whereas Europe imports theater instruments from Pakistan (Nadvi & Halder, 2002).

Sialkot the city of Pakistan, roughly produce alone 25% of hand-held surgical instruments of the

world. Some of them are traded directly with end user but many exporters are labeling the

surgical instruments for developed country as these are produced in that developed country

(Bhutta, 2006). However the SMEs (Small Medium Enterprises) from Pakistan have the

disadvantage that they do not have much recognition for its high quality and large quantity of

sales in this industry. As a result of the thesis, we will also suggest the NATA Surgical

International of Pakistan on what to do, so that it can get world recognition for their specialty in

this industry.

Research purpose

The purpose of this research is to identify and evaluate the possible opportunities and barriers for

the NATA surgical international. Should it start supplying its instruments to domestic hospitals

or European countries by removing the local intermediary?

Data collection methods We will use case study methodology for data collection in our thesis. Researcher Robert K. Yin

defines the case study research method as an empirical inquiry that investigates a contemporary

phenomenon within its real-life context. When the boundaries between that phenomenon and its

real-life context are not clearly evident by only one single source, multiple sources have to be

used (Yin, 1984, p. 23). The data collection and analysis is based on the literature in the areas of

SME internationalization and market screening theories. To check the empirical evidences of the

importance of market screening factors, we have decided to interview NATA‟s management.

The interview will help us to get to know about the company's future intentions and based on this

information we will try to make the company's SWOT analysis. Based on the information

provided by the company's management and our SWOT (Strength, Weakness, Opportunity and

Threat) analysis, we will be in a better position to give the suggestions on whether a localization

approach or internationalization strategy would be better for the company. Along with this

primary information we have also gotten information from authenticated statistical databases like

Hope, Market Access databases, OECD, CIA and WHO. Data sources that we have used include

many websites relating to rules and regulation of trading in the European Union. With the help of

Karlstad University‟s library we had access to many scientific databases like Emerald, Business

Source Premier etc. In short all the secondary sources that we have used are reliable and

recognized worldwide.

The factors, which we have selected, to determine the potential of a market or a country, for

example the economic indicator, market size etc, are very relevant to our product. We have

deliberately not given importance to other factors like political and socio-cultural factors,

because these factors are not influencing the surgical instruments to same extent as other

products.

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Limitation

The limitation of this study is the lack of availability of published data relating to SME from

Pakistan. The biggest barrier related to data collection is that NATA, being a private limited

company, is not bound to publish information about their decision making, which makes it

difficult to get any kind of information about them. For reliability we will conduct a telephonic

interview with the company's management, but we cannot know for sure how correctly the

manager will answer the questions, which can also be a reliability problem. Using NATA as a

case study does not mean that we can generalize it for all SME‟s in Pakistan in the surgical

industry, as every company has their own strengths and weaknesses.

If the information or reports of SMEs were written or published in Pakistan, we could be able to

study more in depth the market situation of Pakistan. This could help us to present the more

reliable situation of Pakistani market.

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2. Background

In this chapter we have told about surgical instruments generally, the surgical

industry of Pakistan and the company, NATA Surgical Instrument’s, profile has

been presented.

World Surgical instrument industry brief overview Surgical instruments are used worldwide, the main market are USA, Japan, and Western Europe.

The trade of surgical instruments is not done directly however it is routed through Tuttlingen

(city of German) lead firms (Nadvi & Halder, 2002). The medical instrument industry‟s history

is dates back to the 17th

century when such instruments were used for the first time. Today USA

is the leader of this industry, with its highly technological medical devices and instruments

(Themedica, 2009). This industry is highly competitive, price sensitive and characterized by

technological advancements. It is also very difficult for a new company to enter this business

because of its huge start-up-cost and technical expertise. The surgical market industry has been

segmented into three categories.

1. Powered instruments (32% of the world)

2. Non-powered instruments (27% of the world)

3. Wound closure devices (41% of the world)

Powered instruments consist of 32% of the market share, which includes devices such as surgical

laser, cutting instruments and electro surgery devices. Non-powered instruments consist of 27%

of the market share, which includes scalpels, scissors, (hand-held instruments) and closure

devices whereas wound closure devices consist of 41% of the market share in this industry.

Manufacturers and suppliers of this industry are a mix of many multinational corporations,

consisting of large, medium and small sized manufacturers, the majority of which are located in

North America, Western Europe (Germany) and Pakistan (ResearchWikis,2010). In the early

20th

century the centers of surgical instruments manufacturing were found in “Sheffield” in

England, “Nogent-sur-Marne” in France, and “Solingen & Tuttlingen” in Germany. The

Tuttlingen still exists as an important cluster today. However in the last quarter of the 20th

century Pakistan has emerged as a key manufacturer of conventional surgical instruments. More

recently, Malaysia, Poland, Hungary, China, Korea, and India have emerged as some important

manufacturers of surgical instruments as well (SIMAP, 2010).

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The Pakistani surgical industry overview

History

In Pakistan, the surgical industry history dates back to the 19th

century, where the American

Mission hospital in Sialkot, for the first time, got its own provided scalpels and other instruments

repaired, successfully from the local artisan community of blacksmiths. It was start of the

surgical industry in Sialkot. From then, in the 1930s, Sialkot started exporting their instruments.

The British government established the Metal Industries Development Centre (MIDC) in 1941 to

institutionalize the local expertise of manufacturing surgical instruments. When Pakistan got

independence in 1947, it inherited 17 registered surgical instruments manufacturers in Sialkot. In

1958 the Surgical Instruments Manufacturers Association of Pakistan (SIMAP) got established

to unite the manufacturers at one platform. The surgical industry got its real boost in the 1960s,

when the government of Pakistan gave various incentive and bonus schemes to this industry. In

the 1980s the demand of surgical instruments from Pakistan increased worldwide. In 1994, US

authority Food and Drug Administration (FDA) banned Pakistani surgical instruments because

of not following the quality measures and standards. This forced the Pakistani manufacturing

companies to improve its manufacturing and getting quality certificates like GMP (Good

Management Practices) , and ISO (International Standard Organization) (SIMAP, 2010).

Key facts and figures of the Pakistani surgical industry

Pakistan is known for manufacturing quality non-powered instruments, which are instruments

that hold 27% of the world market share in surgical instruments. The world market share for

surgical instruments is over $30 billion out of which the share of Pakistan was $250 Million in

the financial years 2008-09. In the financial year of 2007 the market share was $191 Million

which shows a positive growth in 2008-09. The total investment in the surgical industry in

Pakistan is estimated to be around 18 Billion PKR 1(about 170 million Euros). There is almost

900-1000 small and medium sized active surgical units‟ working with a labor force of 10-500

employees in Pakistan. Pakistan is a specialist in manufacturing two types of non-powered

surgical instruments, showed in the next two figures (SIMAP, 2010).

(Non-powered) Disposable instruments, 60% of Pakistan’s surgical export

1 Pakistani Rupees

Figure 1 Disposable instruments( adapted from Photos.tradeholding)

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(Non-powered) Reusable instruments, 40% of Pakistan’s export

Top importing countries of surgical instruments from Pakistan

According to SIMAP (Surgical Instruments Manufacturing Association of Pakistan) statistics,

Pakistan export instruments in many parts of the world, European countries and USA being the

biggest part of it. The given table shows the statistics over the top ten importing countries of

surgical instruments from Pakistan in the financial year 2007-08 (SIMAP, 2010)

Table 1 Top importing countries of surgical instruments from Pakistan (SIMAP, 2010).

How a SME (small and medium sized) exports surgical instruments from Sialkot, Pakistan

According to Nadvi (1999), the variety of surgical instruments in Sialkot is manufactured on

heavy labor and intensive techniques. The main strength of the surgical instruments produced in

Sialkot is that they have a big variety in quality and that they are relatively cheap and made in

big quantity. The manufacturers use several ways to export their instruments to foreign markets.

These ways are;

Foreign buyers, who purchase complete instruments from Sialkot and supply wholesalers,

retailers and end-users in specific markets.

Countries %age 2007-08

United States 24%

Germany 15%

United Kingdom 10%

France 4.82%

Italy 4.45%

UAE 3.60%

Japan 2.35%

Brazil 2.24%

Mexico 2.22%

Russian Federation 1.90%

Total 71%

Europe 34%

*European countries are marked red.

Figure 2 Reusable instruments (adapted from Imghost.indiamart)

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German producers sub-contract all or parts of particular instruments to Sialkot or use

Sialkot firms as OEM (Original equipment manufacturer) suppliers.

Directly supply the instruments to various markets, especially to USA

Foreign sales outlets of Sialkot manufacturers.

Company background

NATA Surgical International is a small manufacturing firm in Sialkot. The

city of Sialkot is famous for exporting surgical, leather and sports products

around the world. In Sialkot most of the businesses are family owned and

managed by the family members. The vast

majorities of firms in Sialkot are small and have

20 or less employees (Nadvi, 1999). NATA

Surgical International was built in 1969 with two employees and

started manufacturing instruments locally. Since its establishment,

NATA has worked, and is still continuing to do so, with the local

suppliers. These suppliers purchase the surgical instruments from

NATA and other local manufacturers and export to foreign countries.

NATA is the key local manufacturer of surgical instruments with a

labor force of 13 persons. NATA manufactures non-powered hand-

held instruments.

Company Mission

To create “Relations of Trust” by providing quality instruments (NATASURGICAL, 2010).

Below is the image of some of NATA‟s manufactured instruments

Forceps Barber scissor Face-lift scissors Explorer

Figure 3: Map of Pakistan (Source: 1992 Magellan geographix)

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Elevators Bone rangers Pliers for orthodontics Hair cutting scissors

Figure 4: surgical instruments ( adapted from natasurgical.com)

Current company situation

According to the company manager of NATA (see appendix), the turnover of the company is in

between Pak Rs. 5 million to 6 million (46,000 Euros to 56,000 Euros) per annum by working

with local suppliers (those suppliers after purchasing from NATA export to foreign buyers).

Since its establishment, NATA worked with local suppliers of surgical instruments. Now NATA

wants to remove this local intermediary barrier and to sell the instruments directly. After

working with local suppliers for a long period of time the NATA has realized that the local

suppliers are not giving them the profit margin that they deserved. Because of having enough

manufacturing experience and specialty the company wants to expand. NATA sees two

opportunities initially for expansion; either they should start supplying surgical instruments to

domestic hospitals directly or start exporting surgical instruments which is normally done by

most of the manufacturer of surgical instruments in Pakistan. To answer the questions (question

9, 10, 11 and 12 which can be seen in the appendix) the difficulties that NATA might face will

be when they will start expanding their business to hospitals, or even on an international level.

Manager replies, we have neither any prior experience of selling surgical instruments directly to

domestic hospital nor of exporting. The competition is also very tight between local and

international manufacturers, however NATA is an established manufacturer of surgical

instruments and do have skilled labor force which is capable of facing the difficult situations.

Furthermore, the company desires to expand its business into foreign markets. An initial studies

carried out by the NATA management, suggested that EU is purchasing almost 50% of the

surgical instruments from Pakistan. We will include this in our research and try to explore the

opportunity for NATA in the European markets. Finally after the research we will suggest the

best investing options for the company.

http://www.natasurgical.com/largeview.asp?catid=30-288-0-0-0-en&Pid=8361&LngID=

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SWOT Analysis of NATA

Strength Weakness

Established and experienced manufacturer of

surgical instruments

Skilled labour force

Cheap production cost

Need to obtain quality assurance certificates

No brand recognition

Lack of international market awareness

Opportunity Threats

Exporting surgical instruments to foreign

markets

Supplying surgical instruments to domestic

hospitals

Increased competition at international level.

Table 2: SWOT Analysis of NATA Surgical International (prepared by authors (Ali & Faisal))

Competition in the surgical instrument industry: The non-powered hand-held instruments, which the Pakistani manufacturer NATA is producing,

are also manufactured by Germany, Korea, France, Hungary, Poland and England. However

Germany and Pakistan are the only two countries who are producing these instruments in high

quantity and quality (Nadvi & Hearld, 2002).

Key success factors of Pakistani surgical instruments manufacturers:

The key factors behind the success of the manufacturers and exporters of surgical companies like

NATA in Pakistan are the cheap price and good quality instruments. For example: it costs $1 US

to produce one pair of surgical scissors in Pakistan. Those pair of scissors would be exported to

at a price of $1.25 to Germany which may probably sell it to a hospital at a price of around $80

(Bhutta, 2006). The cost of the producing surgical instruments is actually very low because of

cheap labor and production costs. This is why Pakistani surgical instruments pose a big threat for

German based surgical companies. However Pakistan still has to focus on a few things, which

they lack, to become number one, which will be discussed in the next part.

Areas to improve for Pakistani surgical instrument manufacturers:

Although the cheap labor and production cost give Pakistan huge competitive advantages over

German based surgical instruments manufacturers, Pakistan still needs to do a few things to

become number one. Pakistani manufacturers are not investing in the R&D (Research and

development) and are unable to establish their own brands. This is what is costing them, because

the German based companies take advantage of R&D made by their manufacturers of surgical

instruments and earn big profit on Pakistani surgical instruments (Nadvi & Hearld, 2002).

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3. Criteria for the selection of market(s)

In this chapter the criteria’s for the selection of potential markets have been

given.

Market screening is a cost effective method for identifying a potential market, which comes

before taking the decision of entering into the new market (Russow & Okoroafo 1996). It is very

important for a company to screen the market before entering it and to be very clear on which

kind of information is needed before doing business there. This provides a good vision of new

markets and helps the company to take accurate decisions. As stated by Russow & Okoroafo

(1996) the ability to screen the market globally depends on the premises that the potential market

can be identified by comparing and evaluating country characteristics. According to Darling and

Kash (1998) the opportunities for the small and medium size companies are numerous, but the

SME must first study the situation with great care and intensity. The firms go international

prematurely in fear of missing opportunities, but this can cost them, because of mistakes they

might commit. They would not have enough experience to enter such a large market or not

knowing enough about the respective market. They need to understand the dynamics of doing

business in foreign markets. As stated by Samiee (1994, pp. 579-604) the success will come to

those who identify and meet a customers demand solidly.

The criteria for identifying and selecting markets are described by various authors. As Young et.,

al (1989) stated that it is highly important to know the market size and economic development of

the potential country a company wants to enter. Douglas and Craig (1983) emphasized the

importance of the market size and level of economic development but only after the prescreening

of the analysis of the respective company and product characteristics. Further Green and Allaway

(1985) developed and tested a screening technique using one measure of market size, shift share

(relative growth rates) of imports. By studying these theories and techniques we have decided to

screen different markets on the basis of market size, economic development and growth rate

(imports of surgical instruments from Pakistan). For identifying potential and best countries for

export surgical instruments we have drawn the following chart. This will become the base of

evaluating and identifying the potential markets.

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Criteria of market selection is as follows;

Table 3: criteria for market selection (The table is constructed by the authors (Ali & Faisal))

Reasons behind the selection of factors: To screen potential markets for the exports of surgical instruments we have taken three most

important factors, which are market size, economic development and market growth. We have

neglected other demographical and competition factors. The reason behind the underestimation

of demographical factors is related to the products being too standardized and have very little or

no effect on the demographics of the people. Also, for competition related factor ignorance in the

selection criteria is because we can easily find the cases where the countries only import a

product when at domestic level they don‟t have quality or quantity production. Hence the

competition related to export to a particular country may be high by keeping this factor in mind

that the market growth factor may be helpful to clear the picture relating to this.

Reasons behind the allocation of scores to the factors: The relative importance of the screening criteria is an issue that has remained unresolved till

date. This issue still has not addressed in the literature too. Specifically, should each of the

criteria be assigned an equal weight? Or is one measure more important than the other? While

authors recommend that users assign weights to the criteria, (e.g. Root, 1994) none provide a

description of how to accomplish this task.

Based on our experience, wisdom and interview with the management NATA we have given

importance to some factors over others. We know that the importance of each market screening

factor varies from product to product, depending on the relevance of the factors for the respective

industry. But among all of our three market screening factors, the economic development is more

important than market size and market growth. Vernon (1966) and Wells (1968) also suggested

Factor Sub Factor Points Criteria Maximum Score

Market Size (30)

Hospitals 100 = 1. 1000 = 10 10

Population 10 Million = 1. 100

Million =10

10

Growth rate of

population

0.2 % = 1, 1 = 5 5

Life expectancy 50 = 1 , 90 = 5 5

Economic

Development(40)

GDP (Gross Domestic Product) 100 Billion = 1 10

Health Budget 1% = 1 20

Inflation Rate 0% = 10 , 10% = 0 10

Growth / Decline of 5 years

(30)

Imports from

Pakistan

0,5 M euro = 1 30

Total 100

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that the level of economic development and market size are important in explaining trade and

investment patterns. Even Ball and McCulloch (1993) stated that screening, as the first step in

assessing a country, requires an evaluation of market size and economic development factors.

Cavusgil (1985), Connolly (1987) and Cundiff and Hilger (1984) endorsed similar techniques

and criteria. This criterion is also supported by (Russow and Okoroafo, 1996) in their article “On

the way towards developing a global screening model”. In this article the Table IV, titled

“Summary of Factor Analysis Results”, has mentioned some factors, in order of importance with

average percentage of variance. That factor has been accounted for across the six samples of

research. According to the table Level of economic development got 13.9, Market size growth

10.1 and Trade 9.5 numbers in terms of importance. These market screening factors and their

relative importance in terms of scores are somehow similar with criteria defined in this thesis.

Market size: (30 score)

In our criteria, we have given market size 30 score, as it is an important factor to understand how

big a market is and what is the opportunity for the company to opt for this market. We will study

further about hospitals, population of the country, life expectancy and growth rate of the

population. This will tell us the current and future size of market.

Economic development: (40 score)

Economic development is the most common indicator used for identifying country‟s potential.

We will study about the GDP, health budget and the inflation rate of the country to know about

the economic development.

Growth / Decline: (30 score)

In the growth part we will only study about the imports of surgical instruments from Pakistan

over the last five years, which will help us to identify a potential country for export. By studying

this import of surgical instruments of particular EU countries, we will also see the growth and

decline in last five years.

Scoring scale for the surgical potential countries

Scoring Scale as follows

Scale Description Scale Score

High Potential Above 70

Moderate Potential 50 - 70

Average Potential 40 - 50

Less Potential Below 40

Table 4: scoring scale for the surgical potential countries (The table is constructed by the authors (Ali & Faisal))

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We can categorize the EU countries on the basis of their score into 4 types of potential markets.

High potential markets, moderate potential markets, average potential markets and less potential

markets. According to scale the countries that will get total score of 70 or more than 70 on

factors at market size, economic development and market growth indicators will be categorized

as high potential countries. The countries under the high potential will indicate the more chances

and favorable trends relating to market entry. The exporters relating to surgical instruments will

be safer as compared to the other categories if they decide to enter in a high potential country.

Countries that will get a total score of between 50 and 70 on factors of market size, economic

development and market growth indicators will be categorized as Moderate potential countries.

The Moderate potential countries will not be as attractive as the high potential countries but will

have opportunities for exporters to some extent. The third category is allocated for the average

potential Countries it would be given to countries that get total score of at-least or equal 40 and

less than 50or equal to 50 on factors of market size, economic development and market growth

indicators.

The average potential countries indicate that the exporters can find some market opportunities

very favorable and some may be unfavorable. So the exporters of surgical instrument can make

decision based on their strengths to expand in average market or not. The final category of scale

is low potential countries at this category the country will have low score on the factors like

market size, economic development and market growth which indicate it as unfavorable for the

exporter. The countries that will get score of ≤40 will be ranked under the low potential

countries.

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4. Case study

This chapter contains our case study, which has been done over Pakistan and EU

countries.

Overview of Pakistan

Pakistan is a country in South Asia with an area of 7, 96, 095 sq. km and having almost 174

million people. Pakistan got independence in 1947 from the British Empire (Tourism, 2010).

Pakistan is a major exporter of textile, rice, leather goods, sports, chemical goods and surgical

instruments (EconomyWatch, 2010). According to World Bank, Pakistan is a low-income

country. 55% of the people are illiterate (US Department of STATE, 2009).

How hospitals purchase surgical instruments in Pakistan

In Pakistan, as like other countries, hospitals purchases surgical instruments through biding .The

bidder, who offers the lowest price to the hospital win the auction to supply the instruments.

However, there are a lot of difficulties for a SME (Small and Medium Size Enterprise), like

NATA Surgical International, to start supplying to hospitals often because of lack of contacts. It

requires a lot of contacts with those who are responsible for these auctions and biddings, to be

able to become a part of them. Corruption in the health sector in Pakistan is a big barrier for

small SMEs (Small and Medium Size Enterprises) to win the auctions and biddings the supply

surgical instruments to hospitals. It‟s also possible for the low quality instruments to get through

the system, because there is not any quality control department in the hospitals of Pakistan.

However Pakistan is currently trying to establish some mechanism for procurement of surgical

instruments and drugs (heartfile , 2007).

Problems that can cause difficulties to work locally

In general, the surgical industry expansion may require many costs that can be financial and non

financial (Illias, 2005). In Illias‟s journal (2005) “Families and Firms”, he said that agency costs

and labor market imperfections exists in Pakistan. He shares some result of survey conducted by

him. He found problems which the manager may face while doing business in Pakistan, are;

High cost of finance

In Pakistan, the cost of finance is very high due to inflation in country. If the company require

bank loan the bank will charge 12.5% interest rate to the creditor. It means if NATA Surgical

International takes any loan from bank the company will pay 12.5% markup on the borrowed

amount which is very high (Ibrahim Sajid Malick, 2010).

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Difficulty in retaining buyers

In the domestic market, it is very difficult to retain the buyer due to strong competition. The

buyers are also aware of this situation and retention of buyer becomes difficult in Pakistan (See

Appendix, Interview).

Prolong process for credit recovery

In Pakistan after supplying the instruments to hospitals the surgical instrument manufacturing

companies have to wait for a long time to get payment for the instruments supplied. As most of

hospitals and customers use credit system for purchasing of instruments. The process is a long

due to involvement of many assurance officers and hierarchical system of government. Due to

this procurement system and lengthy procedure the Small companies like NATA cannot do

business with hospitals easily as they have to wait for their recovery for a long period.

To expand locally the owner or manager has to decide among various positive and negative

points. According to World Bank‟s projection of doing business in South Asia, (2007) „„It is

relatively easy to start and close a business in Pakistan.” On the other hand, there are some

problems associated with these types of easiness. For example, according to a report of doing

business in South Asia (2007), getting credit in Pakistan is hindered due to having a weak

bankruptcy and collateral laws are being practiced there.

Criteria study

In Pakistan there are almost 948 hospitals, but the life expectancy of Pakistani people is only

65.26 years. According to Central intelligence agency of US (CIA) in year 2010 Pakistan is one

of the most populated countries in the world with its population being almost 174, 5 million

people. Along with this high population number, the population growth rate is also high in

Pakistan. CIA in year 2009 found 1.555% per year population growth rate. Economically

Pakistan is not a very healthy market, due to its high inflation rate as stated by CIA in year 2009

with almost 14.2%. The GDP (Gross Domestic Product) purchasing power parity of Pakistan as

stated by CIA in year 2009 is almost 449 billion. According to WHO (World Health

Organization) Pakistani government spends only 2.00 % percent of the gross domestic product as

healthcare budget (EMRO, 2010).

Source: CIA, EMRO, Finance. (This table is constructed by authors (Ali & Faisal))

Screening Factors Sub factors Facts Score

Market size (30 Max)

Hospitals and Dispensaries 948 9,48

Life expectancy 65.26 1,5

Population 174,578,558 10

Population growth rate 1.555% 5

Economic factor (40 Max)

GDP (purchasing power parity) 449.3 billion 4,5

Inflation rate 14.2% 0

Government spending on healthcare % of GDP 2 2

Pakistan Total Score 33,98

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In the selection criteria we have used the criteria for European countries in the import of surgical

instruments from Pakistan, due to that we have given exemption to Pakistan and will consider the

% age as an achieved score of Pakistan.

Summary of Pakistan score:

Sr Country Score* %age** 1 Pakistan 33,98 48,54%

* Out of 70 ** %age of Pakistan will be considered as the score

The total score Pakistan has earned is 33, 98 out of 70 on the basis of our criteria. However to

equalize the criteria with European countries we have divided the achieved score with the total

score to get a percentage of Pakistan‟s score.

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Overview of Europe Europe is one of the lucrative markets of the world. The members of the EU constitute the

world‟s largest and leading trading block. They account 20% of the world trade excluding

internal trade with each other, although they are only 6% of the world‟s population. EU is the

world‟s largest exporter and second largest importer of commercial goods and services (Some

Facts of Europe, 2001). Europe is the biggest market for Pakistan‟s surgical instruments.

Pakistan exports surgical instruments almost 50% only to European countries. In our research,

we have collected the trade data of surgical instruments imports from Pakistan over five years of

all the European countries.

EU relationship with Pakistan

Pakistan in the year 2003 to 2007 had the GDP growth rates of 7.3% the reason behind that the

country has been increasingly integrated with the global economy. And due to this integration

the Pakistan has increased its trade with all countries in the world. The total trade has been

increased to €40 billion in 2006. The EU also supported this integration of trade from Pakistan

by granting Pakistan's exports to the EU reduced tariffs under the EU's Generalized System of

Preferences. The support has helped the Pakistani trade to a great extent and almost 20% of

Pakistan's exports enter the EU at zero tariff. Along with this more than 70% Pakistani goods

enter into EU at a preferential rate (ECT, 2008).

Trade rules and regulation of EU

The EU consists of 27 countries. The trade within EU block is based on common external trade

policies and measures (HKTDC, 2007).

Trade Policy

All the important measures that can affect the trade of goods and services are covered by the

European Union‟s common commercial policy. This policy has also covered issues related to the

respective companies‟ laws, rules & regulations, technical products, taxation and enforcement of

intellectual property rights. The European Union has the role of a custom union, as it make sure

that the same import duties are levied on every country in the union that trades with a country

outside the union. The policies support the liberalization of the trade where the countries support

the elimination of custom barriers and restriction for trade worldwide (HKTDC, 2007).

Restrictions related to import and export into EU

The EU trade policy supports the fair trade between and outside member countries. The EU trade

policy allows the member countries to apply defensive trade measures to counter unfair trade

practices. Inspection measures can be taken by member countries. The purpose behind these

actions is import licensing system for monitoring purposes. For protection of harmful and

massive imports, EU members can impose Quota system on the import of some products. And

also to restrict some specific exports, the EU can take safeguarded measures. And of course

antidumping measures can be taken if a producer tries to dump the products in any member

country. The import of pirated or counterfeit goods is also prohibited in the EU trade policies.

EU has applied different control measures on iron and steel products, which may include

http://ec.europa.eu/trade/wider-agenda/development/generalised-system-of-preferences/

http://ec.europa.eu/trade/wider-agenda/development/generalised-system-of-preferences/

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surveillance or double checking system with or without quantitative restrictions. For some heath

related issues the EU has adopted a directive on the control of the use of nickel in objects

intended to avoid contact with human skins. The companies exporting to Europe also need to

take the product safety standard into consideration. For this companies need to achieve

certificates to ensure the product safety. The exporters need to be aware of the potential threat

that can occur while using the product in different means (HKTDC, 2007).

Tariff classification and import duties

For determining import duties and commodity codes in EU there is a harmonized commodity

system. For imported goods the custom authority can charge import duty on CIF (Cost, Insurance

and Freight) value of the product. However the general rule is that the customs value will be the

transaction value, i.e. the price actually paid, which may include expense items like commission

and brokerage, cost of container, cost of packing, royalties and license fees, cost of transportation

and insurance of the imported goods, loading and handling charges associated with the transport

of the imported goods (HKTDC, 2007).

Statistics of imports of surgical instrument in EU countries for the last 5 years from Pakistan:

Sr EU Country Import of surgical instruments from Pakistan : Value in 1000 Euro

2005 2006 2007 2008 2009 Grand Total Grand % age

1 Germany 19107,2 19898,4 23463,2 22257,3 23301,9 108028,0 36,72

2 United Kingdom 12596,1 16303,6 18958,4 19575,2 18972,4 86405,6 29,37

3 France 4979,7 5212,0 6840,7 7942,4 7654,1 32629,0 11,09

4 Italy 3446,2 3835,6 4069,0 4442,2 4635,5 20428,5 6,94

5 Netherlands 1256,8 1589,1 2654,6 1276,5 1652,3 8429,3 2,86

6 Belgium 840,6 984,5 1458,5 1204,3 2430,6 6918,4 2,35

7 Hungary 117,6 818,0 1770,9 2202,8 1210,5 6119,8 2,08

8 Spain 921,0 945,5 1026,8 847,6 807,8 4548,7 1,55

9 Denmark 841,6 1033,0 901,3 810,8 868,6 4455,3 1,51

10 Poland 560,3 783,9 895,8 964,0 932,5 4136,5 1,41

11 Austria 200,2 459,6 262,2 229,4 1578,5 2730,0 0,93

12 Romania 344,1 452,9 480,1 426,1 281,2 1984,4 0,67

13 Czech Republic 228,6 189,9 258,2 245,6 821,3 1743,5 0,59

14 Portugal 224,8 281,2 318,0 401,8 362,1 1587,9 0,54

15 Greece 160,5 130,7 275,7 199,6 139,1 905,5 0,31

16 Sweden 130,8 171,4 201,7 172,2 143,8 819,9 0,28

17 Bulgaria 166,1 242,1 68,8 111,3 129,9 718,1 0,24

18 Ireland 111,5 76,8 94,8 166,4 85,7 535,2 0,18

19 Lithuania 46,2 49,0 62,8 84,5 48,5 290,9 0,10

20 Finland 33,7 43,0 59,2 40,7 56,4 233,0 0,08

21 Latvia 56,3 40,7 25,1 34,1 18,1 174,3 0,06

22 Cyprus 7,0 5,6 11,5 54,9 41,9 120,8 0,04

23 Slovakia 12,4 19,3 21,9 28,0 30,0 111,5 0,04

24 Estonia 15,2 31,1 22,2 5,5 4,0 78,0 0,03

25 Malta 30,1 15,0 12,7 7,4 9,0 74,3 0,03

26 Slovenia 0,2 5,2 4,5 1,0 6,6 17,3 0,01

27 Luxembourg 0,0 0,0 0,0 0,0 2,8 2,8 0,00

Grand Total 46434,9 53616,86 64218,32 63731,2 66225,1 294226,34 100,00

Table 3: Last five years European countries surgical imports data from Pakistan (The table is constructed by the authors (Ali & Faisal)) Source: Market Access Database

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0,0

5000,0

10000,0

15000,0

20000,0

25000,0

2005 2006 2007 2008 2009

Germany five years imports : value in, 000 euro

European countries explanation according to the criteria of selection:

Germany:

The German market remains the largest surgical

instruments import market throughout the

history of Pakistani exports. According to HOPE

(Hospitals of Europe), Germany had more than

3350 hospitals in the year of 2006. According to

CIA‟s (Central Intelligence Agency) estimation

of the year 2010, the population of Germany is

almost 82 million and the life expectancy of

Germans is almost 79 years. The government

spending on health budget is 10.4% of the GDP,

as mentioned by OECD (Organization for

Economic Corporation and Development) in the year 2001. The inflation rate in the year 2009

was 0% and its GDP (Gross domestic Product) purchasing power parity was $2.811 Trillion

(highest in Europe), which can be the thing that have attracted the exporters of surgical

instruments for attaining a high profit margin (CIA). The table also shows that the Pakistani

exporters of surgical instruments have been succeeded in exporting more than 35% of the share

of the EU exports to Germany in the last five years (Market Access Database, 2010).

United Kingdom:

According to CIA‟s estimation for the year 2010, the United Kingdom has a population of more

than 61 million and a population growth rate at 0.28%. Because of these indicators, UK is also

expected to be one of the markets with highest potential for NATA Surgical International. The

share of the United Kingdom remains above 25% of the total Pakistani surgical instruments

exports to EU (Market Access Database, 2010). In the United Kingdom, like other countries, the

major customer groups are hospitals. HOPE‟s data, related to the countries profiles of the year

Screening factors Sub factors Facts Score

Market size (30

Max)

Hospitals 3359 10

Life expectancy 79.26 3.9

Population 82329758 8.2

Population growth rate -0.05% 0

Economic factor

(40 Max)

GDP (purchasing power parity) $2.811 TRL 10

Inflation rate 0 10

Government spending on healthcare % of GDP 10.4 10.4

Market growth

(30 Max) Last five years sales (Value in 000 Euro) 108028 30

Germany Total score 82.53

Table 4: The Scoring of Germany based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, OECD and market access database of Europe

Graph 1: five year surgical instruments import of Germany from Pakistan (Source: market access database)

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0,0

1000,0

2000,0

3000,0

4000,0

5000,0

6000,0

7000,0

8000,0

9000,0

2005 2006 2007 2008 2009

France Surgical imports from Pakistan: Value in, 000 Euro

2007, shows that UK has 2312 hospitals. Furthermore

the OECD health related data of the year 2007 shows

that UK‟s government spends 8.4% of their GDP on

the health sector. Other than the hospitals, the

economic and growth in the population also attract

the attention of the exporters. CIA‟s estimation of

2009 shows the GDP purchasing power parity of UK

was $2.149 trillion and investors can see this

adjustment cost to balance the inflation rate. The

inflation in UK, as found by CIA in the year 2009,

was 2.1% (CIA, 2009). Data from the past five years

also shows that almost 30% of Pakistani surgical instruments exports, to EU, go in the UK

(Market Access Database, 2010).

Table 5: The Scoring of U.K based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

France: France is ranked as the third country in EU

which has imported surgical instruments from

Pakistan in the last five years. France shows high

potential for manufacturers and exporters of

surgical instruments as HOPE‟s data for the year

2005 shows that it has 2856 hospitals. This

indicates a big market size of surgical instruments

and their demand. From CIA‟s estimation of 2010

France almost has a population of 65 million people

and a population growth rate at 0.5%. Because of

the high population and their growth rate being

more than others, France has a huge demand for healthcare instruments. The healthcare facilities

are also good and people have a life expectancy rate, according to the CIA 2010 estimation, at

almost 81 years. According to data from OECD, in the year 2007 the government spent relatively


Market size

(30 Max)

Hospitals 2312 10



Population growth rate 0.28% 0.014

Economic factor (40

Max)


Inflation rate 2.1% 7.9


Market growth (30

Max) Last five years sales (Value in 000 Euro) 86405.6 30

UK Total score 76.33

Graph 2: Five years surgical instruments import of UK from Pakistan (Source: market access database)

0,0

5000,0

10000,0

15000,0

20000,0

25000,0

2005 2006 2007 2008 2009

UK Surgical imports from Pakistan: Value in, 000 Euro

Graph 3: Five years surgical instruments import of France from Pakistan (Source: market access database)

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high on the health sector, which was 11% of the GDP. This is a very nice allocation for the

health sector and it explains the attraction for related industries like surgical instruments and

pharmaceutical etc. The economic indicator also shows positive sign for the export of surgical

instruments to France. The other benefit of working in this market is that it has the lowest

inflation rate. Overall the export to France in the last five years by surgical instruments

manufacturers has remained high and it constitutes almost 10-12% of the Pakistani surgical

exports in the EU (Market Access Database, 2010).

Table 6: The Scoring of France based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

Italy: The Italian market has good potential for the

Pakistani surgical instruments. Even though Italy has a

fewer number of hospitals, compared to other big

countries in Europe, the country has maintained a

consistency of importing Pakistani surgical instruments,

and their demand is high because of the country‟s

population. According to CIA (2010) Italy almost has a

population of 59 million. The healthcare facilities are

also good, like most of the other countries in Europe.

According to CIA‟s estimation for the year 2009 Italy

had an inflation rate at 0.6%. The OECD data for the

year 2007 states that Italy has the allocation of 8.7% of

their GDP as healthcare budget, which can be a reason for the health companies to enter the

Italian market. Another reason, of being among the potential countries for the surgical

companies, is the GDP purchasing power parity of the population. CIA made estimation in 2009

of the GDP of Italy which was 1.76 trillion. Data of the past five years indicate that Italy

constitutes 6-7% of Pakistan‟s surgical exports in the EU (Market Access Database, 2010).


Market size

(30 Max)

Hospitals 2856 10




Economic factor (40

Max)



Government spending on healthcare % of GDP 11 11

Market growth (30

Max) Last five years sales(Value in 000 Euro) 32629 30

France Total score 81.43

0,0

1000,0

2000,0

3000,0

4000,0

5000,0

2005 2006 2007 2008 2009

Italy Surgical imports from Pakistan: Value in, 000 Euro

Graph 4: Five years surgical instruments import of Italy from Pakistan (Source: market access database)

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The Netherlands: The export of Pakistani surgical

instruments to the Netherlands was doubled in the year

2007. After that the trade once again became stagnant

and came to the previous level. The CIA‟s estimation

related to the population for the year 2010 shows that

the Netherlands has almost 17 million people. That‟s

why the country seems to be the 5th

largest potential

market for Pakistan. According to CIA‟s estimation of

the year 2010, the Netherlands‟ population growth is

0.41% per year, which is also an indicator of its big

market in Europe after the United Kingdom, Spain and

France. Another reason of considering it as a potential

market is the health budget allocation of the Netherlands government, which is 9.8% of their

total GDP budget as stated in the OECD data for the year 2007. CIA estimated in 2009 that the

country had an inflation rate at 1.2%. However the government spends a lot of money on

healthcare which is a good reason for entering the market. Other than the health budget

allocation, the GDP purchasing power parity, taken from the CIA estimation for the year 2009, is

$654.9 billion. These reasons explain the country‟s being in the potential market list by any

foreign exporter. The past export trends are also encouraging, like Pakistan for example export

2.5% of their export to the Netherlands from the EU share.


Market size

(30 Max)

Hospitals 1283 10

Life expectancy 80.2 4



Economic factor (40

Max)

GDP (purchasing power parity) 1.76 TRL 10



Market growth (30

Max) Last five years sales(Value in 000 Euro) 20428.5 30

Italy Total score 77.91

Table 7: The Scoring of Italy based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

0,0

500,0

1000,0

1500,0

2000,0

2500,0

3000,0

2005 2006 2007 2008 2009

Neatherlands Surgical imports from Pakistan: Value in, 000 Euro

Graph 5: Five years surgical instruments import of the Netherlands from Pakistan (Source: market access database)

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Belgium: Belgium is not a big populated country.

According to CIA‟s estimation for the year 2010, the

country has a population of only almost 1.5 million people.

As stated in HOPE for the year of 2007 it has only 210

hospitals. The exporters of Pakistan rank the Belgian market

lower compared to other European countries. According to

CIA 2010 the people have an average life expectancy of

almost 80 years which is relatively high. The inflation rate

in Belgium, according to CIA in the year 2009, was equal

to 0%. Irrespective of having a low inflation rate and the

government spending more than others on the health sector, the factor which has made Belgium

a less potential market is it‟s small market size. The statistics of the past five years indicate that

the exports to Belgium have been fluctuating from the year 2007 to 2009. However in the year

2009, Belgium increased imports of surgical instruments. The last five years average share of

Belgium remained almost 2.3% of the total exports to EU (Market Access Database, 2010).


Market Size

(30 Max)

Hospitals 190 1.9


Population 16715999 1.6716

Population growth rate 0.41% 0,021

Economic factor (40

Max)

GDP (purchasing power parity) $654.9 BL 6.54



Market growth (30

Max) Last five years sales(Value in 000 Euro) 8429.3 16,9

The Netherlands Total score 49.49

Table 8: The Scoring of the Netherlands based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

Table 9: The Scoring of Belgium based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe


Market size

(30 Max)

Hospitals 210 2.1


Population 1041436 0.104144


Economic factor (40

Max)

GDP (purchasing power parity) $381 BL 3.81

Inflation rate 0 10


Market growth (30

Max) Last five years sales(Value in 000 Euro) 6918.4 13.8

Belgium Total score 44.05

0,0

500,0

1000,0

1500,0

2000,0

2500,0

3000,0

2005 2006 2007 2008 2009

Belgium Surgical imports from Pakistan: Value in, 000 Euro

Graph 6: Five years surgical instruments import of Belgium from Pakistan (Source: market access database)

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Hungary:

The Hungarian market is not a big potential

market for surgical exports instruments from

Pakistan; it only stands a bit of a chance to

become a market for them. According to data

taken from Hope for the year 2007 there are 177

hospitals working in Hungary. And CIA

estimation of population related to the year 2010

indicated that the population of Hungary is almost

10 million. The life expectancy is compared to

other European countries is very less which is

indicated in CIA in year 2010 as 73 years. The GDP purchasing power parity is also very less as

compare to other European countries. The last five years trade relating to surgical equipment

with Hungary was increasing till 2008 (3.46% of exports of EU) but in 2009 the imports

decreased significantly. The share of imports of surgical instruments in Hungary from Pakistan

for 5 years was only 1.8% of EU (Market Access Database, 2010).

Spain: Spain is considered to be a moderate potential market. HOPE‟s data for the year 2006

indicated that it has almost 746 hospitals. Spain is ranked as a median market due to positive

population growth rate and market size in terms of hospitals especially. The life expectancy rate

of the country indicates that the people are taking good advantage of healthcare facilities.

Government spending on healthcare of GDP, as indicated by OECD for the year 2007, is 8.5%.

Exporters see Spain‟s market to be very profitable due to their low inflation rate. The inflation

rate, as stated in the CIA for the year of 2009, is -0.8%. The inflation rate and gross domestic

products based on purchasing power parity is almost $1.368 trillion which is taken from CIA‟s

data from the year 2009. These factors have set the eyes of the exporters of surgical instruments

on this profitable market. From the total exports of Pakistan to the European Union Spain takes a

share of 1.5 - 2 % (Market Access Database, 2010).


Market size

(30 Max)

Hospitals 177 1.77


Population 9905596 0,99056

Population growth rate -0.26% -0.01

Economic factor (40

Max)

GDP (purchasing power parity) $184.9 BL 1,84

Inflation rate 2% 8


Market growth (30


Hungary Total score 35.53

Table 10: The Scoring of Hungary based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe.

0,0

500,0

1000,0

1500,0

2000,0

2500,0

2005 2006 2007 2008 2009

Hungary Surgical imports from Pakistan: 000 Euro

Graph 7: Five years surgical instruments import of Hungary from Pakistan (Source: market access database)

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Denmark: Denmark is one of the countries where

the numbers of hospitals are low. In 2004 the

country has only 70 total hospitals. (Hope, 2009 p

195). And CIA‟s estimation for the year 2010

shows that the population of Denmark is 5.5

millions. The market is not very big but exporters

can see an increasing trend in the future as the

population growth rate is positive. If we see CIA‟s

estimation for the year 2010, Denmark has a

population growth rate of 0.28% per year.

According to a CIA estimation of 2010, the Danes

have a life expectancy equal to 78.3 years. As

estimated by CIA in 2009 the gross domestic product of purchasing power parity for Denmark

was 198.6 billion. But on the other hand there is inflation in the country at the moment, which

was estimated by CIA in year 2009 to be equal to 1.3%. The data from OECD for the year 2007

shows that the government is currently spending 9.8% of their GDP on the healthcare sector,

which is quite a lot, compared to other countries. These economic indicators have made

Denmark as a potential healthcare market for the surgical exports of Pakistan. The current


Market size

(30 Max)

Hospitals 746 7.46

Life expectancy 80.05 4

Population 40525002 4.0525


Economic factor (40

Max)


Inflation rate -0.8% 10


Market growth (30


Spain Total score 53.11

Table 11: The Scoring of Spain based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

0,0

200,0

400,0

600,0

800,0

1000,0

1200,0

2005 2006 2007 2008 2009

Denmark Surgical imports from Pakistan: Value in, Euro 000

Graph 9: Five years surgical instruments import of Denmark from Pakistan (Source: market access database)

0,0

200,0

400,0

600,0

800,0

1000,0

1200,0

2005 2006 2007 2008 2009

Spain Surgical imports from Pakistan: 000 Euro

Graph 8: Five years surgical instruments import of Spain from Pakistan (Source: market access database)

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percentage of Denmark‟s import relating to surgical instruments from Pakistan is 1-1.5 % of the

total EU exports by Pakistan. The trade of Denmark with Pakistan relating to surgical

instruments is decreasing after the year 2006 if we see the last five years trend (Market Access

Database, 2010).

Table 12: The Scoring of Denmark based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

Poland: The Polish market is highly populated as

the population is estimated to be around 3.9

million by CIA in the year 2010 but the population

growth rate is only -0.05%, which has made it the

least attractive market for the exporters of

Pakistan. According to HOPE Poland had 792

hospitals in the year 2006, which is a lot more than

the previous market case Denmark. Another

economic indicator of Poland, which is higher than

Denmark, is the GDP of purchasing power parity

which has been estimated by CIA for the year

2009 to be equal to $690.1 billion. Another thing

that is also estimated by the CIA in the year 2009 is

the inflation rate that is equal to 3.4% and this is the highest inflation rate compared to the other

European countries. According to OECD, in the year 2007 the government was only spending

6.4% of their GDP on healthcare. This reason makes this market less attractive for surgical

instruments suppliers. We can see that the trend of the past five years also isn‟t very encouraging

as it is only 1-1.4% trade of the Pakistani surgical instruments which are supplied to Poland from

the EU share (Market Access Database, 2010).


Market size

(30 Max)

Hospitals 70 0,7


Population 5500510 1,100102


Economic factor (40

Max)


Inflation rate 1.3% 8,7


Market growth (30


Denmark Total score 34.99

Graph 10: Five years surgical instruments import of Poland from Pakistan (Source: market access database)

0,0

200,0

400,0

600,0

800,0

1000,0

1200,0

2005 2006 2007 2008 2009

Poland Surgical imports from Pakistan: Value in 1000 Euro

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Austria: According to HOPE in the year 2007

Austria had 270 hospitals. The country is very

populated as in 2009 CIA estimated that the

country had almost 8.3 million people. It is not a

very high potential market due to its low

population and its growth rate. In the year 2010

CIA estimated that the population growth is

0.05%, though the country has good healthcare

facilities, which can attract some surgical

exporters in spite of a low population growth

rate. The life expectancy, according to CIA„s

estimation in the year 2010, is almost 79 years,

which is relatively high compared to many other European countries. The inflation rate was 0.4%

in the year 2009 according to CIA‟s data. The healthcare facilities are good, with the government

spending, according to OECD‟s report of the year 2007, is 10.1% of their GDP on the health

sector, which is a lot compared to other countries. These factors are the reason for the exporter‟s

to enter the market. If we take a look on the past five years on the export of Pakistan to Austria

we can see a dramatic increase in the year 2009 but the average trade remains lower than 1% of

the total EU exports from Pakistan (Market Access Database, 2010).


Market size (30 Max)

Hospitals 792 7.92








Market growth (30 Max) Last five years sales(Value in 000 Euro) 4136.5 8.3

Poland Total score 43.44

0,0

500,0

1000,0

1500,0

2000,0

2005 2006 2007 2008 2009

Austria Surgical imports from Pakistan: Value in, 000 Euro

Graph 11: Five years surgical instruments import of Austria from Pakistan (Source: market access database)

Table 13: The Scoring of Poland based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

of 61

Table 14: The Scoring of Austria based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

Romania: Romania has low potential of being

a market for the surgical instruments exporters

of Pakistan. The country has a good number of

hospitals, which were 419 in the year of 2006

according to HOPE. As estimated by the CIA

in the year 2010 Romania has a population of

22.3 millions. The Romanian people have a life

expectancy indicated in CIA‟s estimation at

almost 72 years, which is very low compared

to other countries in the EU. The population

growth rate of the country is a decreasing

trend according to the estimation of CIA. According to the CIA‟s 2010 estimation the population

growth rate of Romania is -0.15%. These indicators related to the market have made it a less

attractive market. The gross domestic product which is indicated by the CIA in year 2010 is

equal to $255.4 billion. This only attracts somehow to exporters but the inflation rate makes the

Romanian market as a low potential market. As the inflation rate estimated by CIA for the year

2009 was 5%, which is really high. The healthcare budget allocation indicated in HOPE for the

year 2004 is 5.7% of GDP. This is also low as compared to other EU countries. The country‟s

last five years trade with Pakistan is declining and its average share remains 0.06% of the total

EU export from Pakistan (Market Access Database, 2010).


Market size

(30 Max)

Hospitals 270 2.7


Population 8210281 0.821028


Economic factor (40

Max)




Market growth (30

Max) Last five years sales(Value in 000 Euro) 2730 5.5

Austria Total score 35.90

0,0

100,0

200,0

300,0

400,0

500,0

600,0

2005 2006 2007 2008 2009

Romania Surgical imports from Pakistan: Value in 1000 Euro

Graph 12: year’s surgical instruments import of Romania from Pakistan (Source: market access database)

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Table 15: The Scoring of Romania based on defined criteria by authors. Health expenditures are based on 2004 estimation (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

Czech Republic: The Czech Republic market is

also a less potential market for health related

products like surgical instruments. According

to HOPE 2007 there are 345 hospitals in the

country. The population as estimated by CIA in

the year 2010 is almost 10 millions. The people

have an average life expectancy rate compared

to other European countries. As determined by

CIA in the year 2010 the life expectancy was

almost 76.6 years. The GDP purchasing power

parity estimation of CIA in the year 2009 for

Czech Republic was $256.6 billion, which is a good indicator of economic strength. There was

1.1% inflation in the country as indicated by the CIA for the year 2009, which makes it

potentially low for the foreign exports. According to OECD in the year 2007 the government

spent 6.8% of their GDP on the health budget. The last five years imports of Czech Republic

from Pakistan relating to surgical instruments have varied from 0, 4-1.4% of the total Pakistani

surgical instruments exports to EU (Market Access Database, 2010).


Market size

(30 Max)

Hospitals 419 4.19


Population 22215421 2.221542


Economic factor (40

Max)


Inflation rate 5% 2


Market growth (30


Romania Total score 26.82

0,0

200,0

400,0

600,0

800,0

1000,0

2005 2006 2007 2008 2009

Czech Republic Surgical imports from Pakistan: Value in 1000 Euro

Graph 13: Five years surgical instruments import of Czech Republic from Pakistan (Source: market access database)

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Table 16: The Scoring of Czech Republic based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

Portugal: Portugal imports Pakistani surgical

instruments in a small quantity. The market size of

Portugal is average compared to other EU

countries. According to HOPE in 2005 it had only

204 hospitals and the life expectancy, found by

CIA for the year 2010, is 78.21 years. The

population of Portugal estimated by the CIA is

almost 10.8 million in the year 2010. This is a

good indicator of it being a sizable median

potential market for surgical and healthcare

products. According to CIA‟s estimation of the year

2010, the population is also growing at an average

rate of 0.28%, and Portugal is one of the countries that have a good population growth rate in the

Europe. Other than the market size Portugal is economically attractive too at the moment. CIA

estimated in the year 2009 the GDP purchasing power parity equal to $233.4 billion. Another

attractive indicator is that they have is a low inflation rate. CIA‟s estimation for the year 2009

shows -0.9% inflation rate. According to OECD 2006 the government spent 9.9% of their GDP

equal to the healthcare budget. In the last five years Portugal took only 0.56 % shares of Pakistan

export to EU countries (Market Access Database, 2010).


Market size

(30 Max)

Hospitals 345 3.45


Population 10211904 1,02119


Economic factor (40

Max)




Market growth (30


Czech Republic Total score 29,81

0,0

100,0

200,0

300,0

400,0

500,0

2005 2006 2007 2008 2009

Portugal Surgical imports from Pakistan: Value in 1000 Euro

Graph 14: Five years surgical instruments import of Portugal from Pakistan (Source: market access database)

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Table 17: The Scoring of Portugal based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

Greece: The market size of Greece is average

compared to other EU markets. As HOPE‟s data

for the year 2006 indicates that it has 317

hospitals and CIA has estimated population of 10

million in the year 2010. The population‟s

average life expectancy rate estimated by CIA in

year 2010 is 79.6 years. The population growth

rate is increasing which has made it a median

potential market for the Pakistani surgical

instrument industry. CIA has estimated the

average population growth rate of Greece to be

0.13% in the year 2010, which is a good trend

for a market. The exporters can also see that the

CIA‟s estimation of the year 2009, related to the GDP purchasing power parity of Greek people

was $341 billion, which, among others, is also one of the highest in the EU countries. CIA data

for the year 2009 found the inflation rate equal to 1.2%. However the data taken from OECD

2007 shows that the government spent 9.6% of the Greek GDP which is a good sign for the

surgical related instrument exporters. The trade data shows a decreasing trend of the last two

years of Pakistani exports with Greece. Greece has taken a share of 0.2-0.3% of the total

Pakistani exports to EU in last five years (Market Access Database, 2010).


Market size

(30 Max)

Hospitals 204 2,04


Population 10707924 1.070792


Economic factor (40

Max)


inflation rate -0.9% 10


Market growth (30


Portugal Total score 32.33

0,0

50,0

100,0

150,0

200,0

250,0

300,0

2005 2006 2007 2008 2009

Greece Surgical imports from Pakistan: Value in 1000 Euro

Graph 15: Five years surgical instruments import of Greece from Pakistan (Source: market access database)

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Table 18: The Scoring of Greece based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

Sweden: Sweden has one of the best

healthcare systems in the world. According

to the website www.sweden.se, in the year

2009, the country only had 60 working

hospitals. In the year 2010 CIA found that

the people in Sweden have a life expectancy

of 81 years, which is a clear evidence of the

good healthy environment available for the

people. The country has one of the highest

living standards in the world. The

population of Sweden is not very high.

According to CIA‟s estimation in 2010 it

has only almost 9 million people. The

population growth rate found from CIA‟s data is 0.16% in the year 2010. CIA has found the

GDP purchasing power parity of Sweden in year 2009 to be $333.5 billion and has a very low

inflation rate which is -0.05 percent. The OECD found that in year 2007 the government of

Sweden had allocated 9.11% of their gross domestic product as healthcare budget. These

indicators make Sweden a favorable market for the exporters of the surgical instruments. Over

the past five years the trade share of Pakistani exports to Sweden is 0.28% of the total export of

Pakistan in EU (Market Access Database, 2010).


Market size

(30 Max)

Hospitals 317 3.17


Population 10737428 2.147486


Economic factor (40

Max)

GDP (purchasing power parity) $341 BL 3.41



Market growth (30


Greece Total score 31,77

0,0

50,0

100,0

150,0

200,0

250,0

2005 2006 2007 2008 2009

Sweden Surgical imports from Pakistan: Value in 1000 Euro

Graph 16: Five years surgical instruments import of Sweden from Pakistan (Source: market access database)

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Table 19: The Scoring of Sweden based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Sweden.se, 2009. CIA, OECD, and market access database of Europe

Bulgaria: The market size of Bulgaria seems to be

average. In the year 2007 HOPE counted 340

hospitals in the country. CIA estimated the

population to be almost 7.2 million in Bulgaria in

2010. And also in 2010 CIA estimated the life

expectancy at 73 years. That is an average level of

life expectancy in Europe. The population growth

rate in the case of Bulgaria is very low. According

to CIA‟s data of the year 2010 the population

growth is -0.79% per year. The GDP purchasing

power parity is also estimated by the CIA in 2009

for Bulgaria, which was $90.51 billion. CIA found

in the year 2009 that Bulgaria had an inflation rate

of 1.6% which also has made it a low potential market. According to WHO in 2004 the

government spending on healthcare was only 7.7% of the total gross domestic product. The trade

for surgical instruments in 2006 with Bulgaria was 0.4% of the total Pakistani export to EU but

this percentage has been decreased and has become only 0.2 percent (Market Access Database,

2010).

Table 20: The Scoring of Bulgaria based on defined criteria by authors. Health expenditures are based on 2004 estimation (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, WHO, OECD and market access database of Europe


Market size

(30 Max)

Hospitals 60 0,6


Population 9059651 0.905965


Economic factor (40

Max)




Market growth (30


Sweden Total score 29.65


Market Size (30

Max)

Hospitals 340 3,4


Population 7204687 0,720469


Economic factor (40

Max)




Market growth (30

Max) Last five years sales (Value in 000 Euro) 718.1 1.4

Bulgaria Total score 25.82

0,0

50,0

100,0

150,0

200,0

250,0

300,0

2005 2006 2007 2008 2009

Bulgaria Surgical imports from Pakistan: Value in 1000 Euro

Graph 17: Five years surgical instruments import of Bulgaria from Pakistan (Source: market access database)

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Ireland: Ireland is also not a very populated

country, as CIA in 2010 estimated it to be almost 4

million people with a population growth rate at

1.1%. The numbers of hospitals in Ireland are less.

According to HOPE in 2010 there are currently

176 hospitals working. CIA‟s estimation in the

year 2010 shows that the people have a decent life

expectancy rate of 78 years. The GDP purchasing

power parity found from CIA in the year 2009 was

almost 176.9 billion and the country is very

attractive in the view of their inflation rate. The

CIA had estimated in the year 2009 the inflation

rate to be -1.7%. As found from OECD in 2007

the government spending on the healthcare sector was 7.6% of the total GDP of Ireland. If we

take a look on the past five years on the Pakistani surgical instrument export data to EU, Ireland

has taken averagely 0.18% of the total Pakistani surgical instruments export (Market Access

Database, 2010).

Table 21: The Scoring of Ireland based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

Lithuania: Lithuania is a small country, as according to

CIA in year 2010 it has 3.5 million people and based on

HOPE‟s estimation in 2007 it had 165 hospitals. The

people are enjoying the good health facilities as the

government is spending 6% of GDP on the healthcare

sector. Lithuania is not a big importer of surgical

instruments from Pakistan as they have imported

surgical instruments costing only 0.29 million euro in

last five years. The inflation rate is also a bit high


Market size

(30 Max)

Hospitals 176 1.76


Population 4203200 0.42032


Economic factor (40

Max)


Inflation rate -1.7 10


Market growth (30

Max) Last five years sales (Value in 000 Euro) 535.2 1,1

Ireland Total score 26.47

Graph 18: Five years surgical instruments import of Ireland from Pakistan (Source: market access database)

0,0

50,0

100,0

150,0

200,0

2005 2006 2007 2008 2009

Ireland Surgical imports from Pakistan Value in 1000 Euro

Graph 19: Five years surgical instruments import of Lithuania from Pakistan (Source: market access database)

0,0

20,0

40,0

60,0

80,0

100,0

2005 2006 2007 2008 2009

Lithuania Surgical imports from Pakistan: Value in 1000 Euro

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compared to other European countries. The last five years trend shows that the import of surgical

instruments has been very less; it even went on decline in 2009 (Market Access Database, 2010).

Table 22: The Scoring of Lithuania based on defined criteria by authors. Health expenditures are based on 2004 estimation (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

Finland: The Finish market is a low potential for

the Pakistani surgical exports. If we see the

statistics of the markets, we can see that

according to HOPE‟s estimation in 2007 there

are almost 341 hospitals operating in Finland and

according to CIA in the year 2010 they have a

total population of 5.2 million. Data shown by

CIA in 2010 indicate a population growth rate at

0.10% annually in Finland. The healthcare

system is very good too as the CIA‟s estimation

in the year 2010 shows that the Finish people

have a good life expectancy being 79 years. The economic statistics of Finland are somehow

attractive, as found by CIA, in the year 2009, the GDP purchasing power parity was $182.6

billion. This is not so high compared to other European countries, but CIA had estimated the

inflation rate to be 0% in the year 2009, which is very good compared to other countries. Along

with that as found from OECD in 2007 the government spent 8.2% of their GDP as a total

healthcare budget. The Pakistani export to Finland is between 0.06 - 0.09 % of the total exports

to EU (Market Access Database, 2010).


Market Size (30 Max)

Hospitals 165 1.65


population 3555179 0.35

population growth rate -0.28% -0.01395



inflation rate 4.2 5.8

goverment spending on health care % of GDP 6 6


Lithuania Total Score 18,31

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

2005 2006 2007 2008 2009

Finland Surgical imports from Pakistan: Value in 1000 Euro

Graph 20: five years surgical instruments import of Finland from Pakistan (Source: market access database)

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Latvia: Latvia is a very small European country.

According to CIA it has 2.2 million people only in the

year 2010. In 2004 WHO found out that the Latvian

government spent 6.3% of the GDP on healthcare.

CIA‟s estimation in the year 2010 shows that the life

expectancy at average in Latvia is almost 73 years.

The import of surgical instruments from Pakistan in the

last five year trend shows a decline, as Latvia only

imported surgical instruments at the cost of 0.17

million euro from Pakistan from the year 2005 to 2009.

This trend shows low interest of surgical instruments

purchasing from Pakistan (Market Access Database,

2010).


Market Size

(30 Max)

Hospitals 341 3.41


population 5250275 0.525028

population growth rate 0.10% 0.005

Economic factor (40

Max)


inflation rate 0 10

government spending on health care % of GDP 8.2 8.2

Market growth (30

Max) Last five years sales(Value in 000 Euro) 233 0.5

Finland Total score 28.33

Table 23: The Scoring of Finland based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe


Market Size (30 Max)

Hospitals 94 0.94


population 2231503 0.22315

population growth rate -0.61% -0.0307



inflation rate 3.3 6.7

goverment spending on health care % of GDP 6.3 6.3


Latvia Total Score 18.00

Table 24: The Scoring of Latvia based on defined criteria by authors. Health expenditures are based on 2004 estimation (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, WHO and OECD, market access database of Europe

0,0

10,0

20,0

30,0

40,0

50,0

60,0

2005 2006 2007 2008 2009

Latvia Surgical imports from Pakistan: Value in 1000 Euro

Graph 21: five years surgical instruments import of Latvia from Pakistan (Source: market access database)

of 61

Cyprus: The market size of the Cyprus market is not

very big as the country according to CIA in year 2010

has a population of 1 million only and the population

is growing at a rate of 1.6%. The country has a very

little number of hospitals which has made it a less

attractive market. According to the HOPE in 2006

there were only 94 hospitals in total. CIA‟s

estimation in the year 2010 shows that the life

expectancy index of the population is 77.5 years

which is considered as an average age. The GDP

purchasing power parity, found by CIA in the year

2009, is also low, which is 22.97 billion. Found by WHO in 2004 the government spent 6.3% of

their gross domestic product as healthcare budget. CIA had estimated in the year 2009 the

inflation rate to be 0.9%. Inflation has also played a role in ranking the country in one of the

lowest potential markets for exports. The average total share of Cyprus from Pakistani exports to

EU in the last five years has remained 0.04%. This share was high in the year 2006 when it had

reached at a level of 0.09% but it again started deceasing (Market Access Database, 2010).

Table 25: The Scoring of Cyprus based on defined criteria by authors Health expenditures are based on 2004 estimation (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

Slovakia: According to HOPE‟s estimation in 2007, Slovakia has 143 hospitals. According to

CIA in the year 2010 it has a population of

almost 5.4 million populations. CIA‟s estimation,

in the year 2010, shows that the life expectancy is

75.4 years and the data shown by CIA in 2010

indicate the population growth rate as an

increasing trend. The GDP purchasing power

parity found by CIA in the year 2009 was $115.7

billion with an inflation rate at 1.6%. As the

percentage of share to Slovakia from the total

Pakistani exports to EU is continuously


Market size

(30 Max)

Hospitals 94 0.94


Population 1084748 0,108475


Economic factor (40

Max)




Market growth (30


Cyprus Total score 20.00

0,0

10,0

20,0

30,0

40,0

50,0

60,0

2005 2006 2007 2008 2009

Cyprus Surgical imports from Pakistan: Value in 1000 Euro

Graph 22: Five years surgical instruments import of Cyprus from Pakistan (Source: market access database)

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

2005 2006 2007 2008 2009

Slovakia Surgical imports from Pakistan: Value in 1000 Euro

Graph 23: five years surgical instruments import of Slovakia from Pakistan (Source: market access database)

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fluctuating and at an average the country has taken 0.04% of the total export to EU from

Pakistan. All these indicators are not currently in favor of NATA to export the surgical

instrument to this market (Market Access Database, 2010).

Table 26: The Scoring of Slovakia based on defined criteria by authors (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe)

Estonia: According to HOPE‟s estimation in

2007 in Estonia there were 57 hospitals.

According to CIA in the year 2010 it has a

population of 1.2 million. Data shown by CIA in

2010 indicate a population growth rate at -0.63%

annually, which has probably ranked it as a very

low potential market for the exporters. CIA‟s


expectancy of Estonian people is almost 73

years. According to WHO, in the year 2004, the

government was only spending 5.5% of their

GDP as a healthcare budget and found by CIA in the year 2009, the people only have 24.36

billion GDP purchasing power parity. The inflation rate in the country is very low. The inflation

rate is -0.4% according to CIA‟s estimation in 2009. Compared to other countries in EU, other

factors make Estonia a low potential market for exports. The last five years export data between

Pakistan and Estonia relating to surgical exports shows that the export of Pakistan in Estonia has

decreased. The percentage of Estonian share from the total export to EU from Pakistan has

remained only 0.1%, from 0.3% at start (Market Access Database, 2010).


Market size

(30 Max)

Hospitals 143 1.43


Population 5463046 0.546305


Economic factor (40

Max)




Market growth (30


Slovakia Total score 22.96

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

2005 2006 2007 2008 2009

Estonia Surgical imports from Pakistan: Value in 1000 Euro

Graph 24: Five years surgical instruments import of Estonia from Pakistan (Source: market access database)

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Table 27: The Scoring of Estonia based on defined criteria by authors. Health expenditures are based on 2004 estimation (The table is

constructed by the authors (Ali & Faisal)

Malta: The market situation in Malta is not so

attractive, as according to the hope‟s 2007 estimation

there are only 9 hospitals. According to CIA in year

2010 it has a population of 0.4 millions. The CIA‟s

estimation in the year 2010 shows that life expectancy

rate of people is almost 79 years and population

growth is 0.4%. According to CIA in the year 2009

the gross domestic product purchasing power parity is

$9.831 billion. CIA had estimated in the year 2009 the

inflation rate and the inflation rate is 1.8%.

According to WHO for the year 2004 the

government‟s spending on the healthcare sector was only 9.2% of their gross domestic product.

If we see the last five years exports data of Pakistan‟s export to the European Union, the surgical

instruments trading between Pakistan and Malta has decreased continuously and has remained

only 0.01%. All these trends makes Malta is very less potential market for exporting surgical

instruments (Market Access Database, 2010).


Market Size

(30 Max)

Hospitals 57 0,57

Life expectancy 72,82 3,2

Population 1299371 0,129937

Population growth rate -0,63% -0,03

Economic factor (40

Max)

GDP (purchasing power parity) $24.36 BL 0,2


Government spending on healthcare % of GDP 5,5 5,5

Market growth (30

Max) Last five years sales(Value in 000 Euro) 78 0,2

Estonia 19,72

0,0

10,0

20,0

30,0

40,0

2005 2006 2007 2008 2009

Malta Surgical imports from Pakistan: Value in 1000 Euro

Graph 25: Five years surgical instruments import of Malta from Pakistan (Source: market access database)

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Slovenia: The market size and market

attractiveness of Slovenia is bad compared to

other European countries. The fact is that

according to HOPE‟s estimation in 2007 there

were only 29 hospitals. According to CIA in year

2010 Slovenia has a population of almost 2

million. This has also made a question mark for

exporters on the entry of this market. CIA‟s


expectancy rate is 76 years which is at an average

level, which is also low compared to other

countries in the region. The other non

attractiveness of the market size is a negative

population growth rate which is shown by CIA in 2010 equal to -0.1% annually. The GDP

purchasing power parity found by CIA in the year 2009 was $55.84 billion and the government

spent 8.6% of their gross domestic product as healthcare budget. CIA had estimated the inflation

rate to be 0.8% in the year 2009. The average total share of Slovenia from Pakistani exports to

EU in last five years has remained 0.01% of the total export of Pakistan‟s surgical instruments

export to EU. Its shown that Slovenia has a very small market size for entering and low potential

for exporting surgical instruments (Market Access Database, 2010).


Market size

(30 Max)

Hospitals 9 0.09


Population 405165 0,040517


Economic factor (40

Max)




Market growth (30


Malta Total score 21.69

Table 28: The Scoring of Malta based on defined criteria by authors. Health expenditures are based on 2004 estimation (The table is constructed by the authors (Ali & Faisal) Source: Hope, CIA, and OECD, market access database of Europe

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

2005 2006 2007 2008 2009

Slovenia Surgical imports from Pakistan: Value in 1000 Euro

Graph 26: Five years surgical instruments import of Slovenia from Pakistan (Source: market access database)

of 61

Table 29: Five years surgical instruments import of Slovenia from Pakistan. Health expenditures are based on 2004 estimation Source: Hope, CIA, and OECD, market access database of Europe

Luxembourg: According to CIA in the year 2010 the

population of Luxembourg is almost 4 million and the

average population growth rate is 1.2% annually.

According to Hope‟s electronic book in year 2009 where

they have taken reference of WHO it has 15 hospitals. This

factor has also made it a low potential market for the

Pakistani surgical exporters. CIA‟s estimation in the year

2010 shows that the life expectancy of the people is 79

years. In Luxembourg, as found by CIA in the year 2009,

the gross domestic product of purchasing power parity was

38.37 billion. CIA had estimated the inflation rate to be

0.5% in the year 2009. According to OECD in the year

2006 the government had allocated only 7.3% of their GDP for the healthcare. Trade data

between Pakistan and Luxembourg is only 0.01% share from the total Pakistani exports to EU

(Market Access Database, 2010).

Table 30: Five years surgical instruments import of Luxembourg from Pakistan Source: Hope, CIA, and OECD, market access database of Europe


Market size

(30 Max)

Hospitals 29 0.29


Population 2005692 0.200569


Economic factor (40

Max)




Market growth (30


Slovenia Total score 22.52


Market size

(30 Max)

Hospitals 15 0.15


Population 491775 0.049178


Economic factor (40

Max)




Market growth (30


Luxembourg Total score 21.33

0,0

0,5

1,0

1,5

2,0

2,5

3,0

2005 2006 2007 2008 2009

Luxumburg Surgical imports from Pakistan: Value in 1000 Euro

Graph 27: Scoring of Luxembourg based on defined criteria by authors (The table is constructed by the authors)

of 61

5. Evaluation of Case:

The evaluation of the case practically sums up what we have talked about in the

rest of the case. Other than that we have given our suggestions to NATA about

how it should expand itself on a local and international level, and what difficulties

it might face while doing so.

Local Expansion: To address the opportunity for expanding locally we have studied the

opportunities and barriers for NATA Surgical International. By our defined criteria, Pakistan is

ranked as average potential market with 48 score for NATA to supply surgical instruments. The

study indicates that, Pakistan is a very big country with a huge population and if we see the

Pakistani market in a perceptive of the market size, we can say that it is a big market for surgical

instruments due to huge population size and number of hospitals which are around 1000. With

1000 hospitals in one country, one would think that it would be more than enough to just stay

local, but the health infrastructure and the standards are not good enough in the country (WHO,

2010).

Pakistan has a very large population (174 million) and the population growth rate is relatively

high around 1.55% which is why it has an enormous market size. However the Pakistani market

lacks economic indicators and has proven economically weak as compared to international

markets we have studied in this thesis. The inflation rate in the country is also high, being 14.2%.

Because of this high inflation number, business units in Pakistan cannot get credit easily from

financial institutions. So small business units fear to invest locally, as the return of the

investment will not be much or can even be a loss because of the low rate on the return of

investment. The Pakistani healthcare budget is also very low, as the government only spends 2-

3% of the GDP on the health sector (WHO, 2010).

The profit margin is also a big issue for small and medium size manufacturers in Pakistan. Due

to the low budget in the healthcare sector the hospitals offer very low prices for purchasing

instruments and this makes the competition very tough in Pakistan and decreases opportunities to

expand. Small suppliers like NATA find themselves in difficulties for expansion in local

markets. (See the appendix of interview). Furthermore, the study also shown that bureaucracy

and some corruption in the hospital‟s procurement process is also a big barrier for small

companies to start supplying surgical instruments to hospitals. It makes it difficult for small

companies to enter this business. NATA Surgical desires to sell directly to the hospital and

remove the intermediary of local suppliers. However the situation is not fruitful for the company

to choose this option at this time. We will not suggest NATA to go for this option first, however

when the company gets established in exporting of instruments then it would be also feasible for

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going domestic market. As the financial gains and strong relationship with raw material suppliers

are more available for the companies that work internationally as compare to locally.

Europe: After that we have studied the EU‟s relationship with Pakistan, in the EU countries part of the

case study. The relationship has showed positive signs for NATA and its exports. Trade rules

and regulations of the EU require health related companies to acquire quality assurance

certificates, like ISO for example. Afterwards we studied all the EU countries with our defined

criteria. Four countries are ranked as “highly potential countries” for the export of NATA. These

countries are; Germany, France, UK, and Italy. One country is ranked as “moderate potential

country”, which is Spain and three countries are ranked as “average potential countries”. Further

nineteen countries are ranked as “less potential countries”. In the less potential countries, two

countries have shown positive signs for import of surgical instruments in the year 2009, which

we will recommend NATA to consider as an opportunity.

High potential countries:

The four countries, which are showing good potential for export of surgical instruments, can be a

good place to start from NATA Surgical International. Germany is the most top ranked country

in the assessment of EU countries and is always considered as the second largest importer of

surgical instruments from Pakistan. UK also imports big quantity of surgical instruments

annually. Furthermore, France and Italy remain consistent in purchasing surgical instruments

throughout the export history of Pakistan. In our point of view, NATA Surgical International

should start with these four markets by contacting the importer of surgical instruments in the

respective countries.

Moderate potential countries:

Spain is the only country which has moderate potential for imports of surgical instruments from

Pakistan according to our assessment. Over the past five years, Spain has imported surgical

instruments from Pakistan at the price of 0.45 million Euro. It has a good market size as well as a

good economic situation for exporting surgical instruments.

Average potential countries:

The Netherlands, Belgium and Poland have an average potential of imports of surgical

instruments from Pakistan. NATA Surgical International can export their surgical instruments in

these markets as well. However it requires hard work to find the customers in these countries

compared to the above mentioned countries.

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Low potential countries:

In low potential countries, some countries have shown a good demand of surgical instruments

from Pakistan like Austria, which had imports of surgical instruments in the year of 2009 costing

0.15 million Euro, where as in the remaining four years, the average import of surgical

instruments were only 0,1 million Euro. Czech Republic also showed the same trend of the

purchase of surgical instruments from Pakistan as they have imported at the cost of 0,092 million

Euros from 2005 to 2008 but in 2009 they imported of 0,082 million Euros only. These statistics

show that the demand of surgical instruments from Pakistan is increasing in these countries.

Other countries with an average potential, like Denmark and Hungary, are also consistent in their

purchase of the instruments from Pakistan. The rest of the countries in this regard are low

potential countries, due to their low market size or because they are buying from other countries.

The evaluation of the countries is as follows;

High potential Less potential

Rank Country Score Rank Country Score

1 Germany 82,53 9 Austria 35,90

2 France 81,43 10 Hungary 35,53

3 Italy 77,91 11 Denmark 35,08

4 United Kingdom 76,33 12 Portugal 32,33

Moderate potential 13 Greece 31,77

Rank Country Score 14 Czech Republic 29,81

5 Spain 53,11 15 Sweden 29,65

Average potential 16 Finland 28,33

Rank Country Score 17 Romania 26,82

6 Netherlands 49,49 18 Ireland 26,47

7 Belgium 44,05 19 Bulgaria 25,82

8 Poland 43,44 20 Slovakia 22,96 Scale

Scoring scale as follows; 21 Slovenia 22,52

22 Malta 21,69

Scale description Scale score 23 Luxembourg 21,41

High potential Above 70 24 Cyprus 20,74

Moderate potential 50 - 70 25 Estonia 19,72

Average potential 40 - 50 26 Lithuania 18,31

Less potential Below 40 27 Latvia 18,00

Requirement for export of surgical instruments:

As said in the case study, we have studied that NATA Surgical International is required to obtain quality

certificates from international institutions for being able to export surgical instruments to Europe. This is

because the EU countries require quality assurance certificates of companies and it is even more

important for health related product companies.

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Competition in Europe:

Germany is the second biggest importer of surgical instruments from Pakistan and it even

produces surgical instruments in their own country as well. However the main difference

between Pakistani made and German made surgical instruments is the cost of production. In

Pakistan the labor and production costs of surgical instruments are very low as compared to

Germany and this gives Pakistani manufacturers a bit of a competitive advantage over other

countries. Among EU countries it is mostly Italy, France, Ireland and the Netherlands which are

also exporting surgical instruments along with Germany. However the key cost competitive

advantage gives Pakistani manufacturers little edge over these countries (Pakboi, 2010).

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Conclusion:

In our thesis report, we have tried to research the markets on the basis of available primary

(interview) and secondary data sources like articles, Pakistan and European trade databases,

company website and different internet sources. We did this research work to recommend the

best market to NATA for supplying their surgical instruments. Before start of this study we have

defined a market selection criterion which was the base of selection of markets for supplying

surgical instruments.

In the case study, first we have studied about the Pakistani market and its opportunities and

barriers for NATA to supplying surgical instruments to domestic hospitals. The study showed

that, Pakistan is a big market for selling surgical instruments with 170 million population and

more than 1000 hospitals. However, in Pakistan it is very difficult for a small company to get

into the domestic supplying business. The reason behind is the hospital purchasing system and

the profit margin that a company earns by selling surgical instruments to domestic hospital.

Further the inflation rate is also high which may also reduce the profit margin of the company in

domestic market. In our scoring scale, Pakistan stands as the average potential country for selling

surgical instruments with 48 score. We suggested NATA company that it is not fruitful time to

go for domestic hospitals.

Secondly in the EU countries case studies, we have studied the EU relationship with Pakistan

which was showing positive sign for NATA and trade rules and regulation which indicates the

NATA Surgical International requires to obtaining quality certificates from international quality

organizations. Then, we did study all the EU countries with our defined criteria. Four countries

are ranked as “Highly potential countries” for exporting of NATA. One country ranked as

“Moderate potential country”, three countries are ranked as “Average potential countries” and

nineteen countries are ranked as “Less potential countries”. In the less potential countries, two

countries have shown positive sign for import of surgical instruments in the year 2009 which we

have recommend to NATA to should consider as opportunity.

Overall, on the basis of the case study, we have recommended NATA Surgical International to

start searching for surgical instruments buyers in the countries priority wise. The reason for

exporting surgical instruments is the cost of the manufacturing of surgical instruments, which is

very low compared to other manufacturing countries. It gives a unique advantage to the company

over other companies in foreign countries. Secondly, the situation is very favorable for Pakistan,

as the demand Pakistani non-powered hand-held surgical instruments are very high in the

potential countries.

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Recommendations: International trade and globalization has reduced the barriers between the countries and now

NATA Surgical International needs to focus on few things by which they can compete on an

international level, if they go for European expansion.

NATA needs to give much more focus on the manufacturing cost of the surgical

instruments. The competition is very high on the local as well as on the international

level. As Nadvi & Herald (2002) describes, intense local competition within Sialkot has

lowered product prices. In addition, there are demands from buyers and end-users to

reduce costs. This is, in part, an outcome of changing demographics and disease profiles

Only focus on costs will not play a vital role in the success of the surgical manufacturing

companies like NATA. The quality assurance, quality control and quality improvement

of the surgical instruments are also very important factors as well. NATA needs to

acquire the internationally recognized quality management system and certifications for

more trust of the buyers and even it is required for exporting the surgical instruments to

EU.

Furthermore, working with future European customer NATA needs to make their supply

chain system more effectively. This would help them to meet the demand and delivery of

product of the future customer in mean time.

Along with the quality management we have seen that Pakistani SMEs lack in the new

products and brand developments (DailyTimes, 2007). If NATA enters a new market, the

new product has to be able to compete with existing companies in the market. But for the

new product development NATA will have to increase its research and developmental

budget. As stated in the trade policy 2009 of Pakistan, the industry has to invest in

research and development (R&D) by pooling their resources and challenging the

scientists to find solutions to the problems faced by the industry. The trade policy of

Pakistan has stated that the country is lacking in brand development and currently the

surgical instruments branding, in Pakistan, is largely done under the brands of foreign

companies, and that is resulting in lower prices for manufacturers.

NATA can take initiatives relating to branding by increasing the budget of their

marketing and advertisements during international trade fairs. The trade policy of

Pakistan 2009 states that the Pakistani government will grant 25% support on brand

development activities to these industries. The NATA Company can increase the

scholarships and trainings for their technical professionals to reduce the gap of research

and development relating to new surgical instruments. The company can also learn from

new international markets. The German market‟s entry can be beneficial for learning

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trades as well as learning experiences relating to the powered instruments manufacturing.

NATA needs to enter the powered instruments market too, which can be proved as a first

mover advantage for the company on a local level.

Further Studies: The Surgical instrument industry is very dynamic and the area which we tried to investigate is

the only a small part of this industry. There are many areas which we think still needs to be

investigated further;

Having very old history, Why Pakistani surgical instruments manufacturing companies

unable to establish the world recognition brand in this industry.

What are the barriers may company face when establishing the brand in this industry.

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Appendix:

(A) EU Market Size:

Sr Country

MARKET SIZE

No of Hospitals

SCORE MAX

10

Life expectancy

SCORE MAX

5 population

SCORE MAX 10

population growth

rate

SCORE MAX

5

SUB TOTAL. MAX 30

Score

1 Germany 3359 10 79,26 3,9 82329758 8,232976 -0,05% -0 22,1303

2 France 2856 10 80,98 4,1 64057792 6,405779 0,55% 0,027 20,5332

3 Italy 1283 10 80,2 4 58126212 5,812621 -0,05% -0 19,8103

4 United Kingdom 2312 10 79,01 3,9 61113205 6,111321 0,28% 0,014 20,0253

5 Spain 746 7,46 80,05 4 40525002 4,0525 0,07% 0,004 15,5161

6 Netherlands 190 1,9 79,4 3,9 16715999 1,6716 0,41% 0,021 7,4922

7 Belgium 210 2,1 79,22 3,99 1041436 0,104144 0,09% 0,005 6,19884

8 Poland 792 7,92 75,63 3,5 38482919 3,848292 -0,05% -0 15,2659

9 Austria 270 2,7 79,5 3,99 8210281 0,821028 0,05% 0,003 7,51363

10 Hungary 177 1,77 73,44 3,3 9905596 0,99056 -0,26% -0,01 6,04771

11 Denmark 70 0,7 78,3 3,8 5500510 0,550051 0,28% 0,014 5,064051

12 Portugal 204 2,04 78,21 3,8 10707924 1,070792 0,28% 0,014 6,92454

13 Greece 317 3,17 79,66 3,9 10737428 1,073743 0,13% 0,006 8,15009

14 Czech Republic 345 3,45 76,81 3,6 10211904 1,02119 -0,09% -0 8,06649

15 Sweden 60 0,6 80,86 4,1 9059651 0,905965 0,16% 0,008 5,61387

16 Finland 341 3,41 78,97 3,9 5250275 0,525028 0,10% 0,005 7,83993

17 Romania 419 4,19 72,45 3,2 22215421 2,221542 -0,15% -0,01 9,60419

18 Ireland 176 1,76 78,24 3,8 4203200 0,42032 1,12% 0,056 6,03632

19 Bulgaria 340 3,4 73,09 3,3 7204687 0,720469 -0,79% -0,04 7,38097

20 Slovakia 143 1,43 75,4 3,5 5463046 0,546305 0,14% 0,007 5,48315

21 Slovenia 29 0,29 76,92 3,7 2005692 0,200569 -0,11% -0,01 4,18492

22 Malta 9 0,09 79,44 3,9 405165 0,040517 0,40% 0,02 4,05052

23 Luxembourg 15 0,15 79,33 3,9 491775 0,049178 1,17% 0,059 4,158178

24 Cyprus 94 0,94 77,49 3,77 1084748 0,108475 1,69% 0,085 4,90297

25 Estonia 57 0,57 72,82 3,2 1299371 0,129937 -0,63% -0,03 3,86834

26 Lithuania 165 1,65 74,9 3,4 3555179 0,355518 -0,28% -0,01 5,39157

27 Latvia 94 0,94 72,15 3,2 2231503 0,22315 -0,61% -0,03 4,33245

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(B) EU Economic factors:

Sr Country

Economic factors

GDP (purchasing

power parity):

SCORE MAX

10

inflation rate

SCORE MAX

10

goverment spending on health care % of

GDP

SCORE MAX

20

SUB TOTAL.

MAX 40

Score

1 Germany $2.811

TRL 10 0 10 10,4 10,4 30,4

2 France $2.11 TRL 10 0,1 9,9 11 11 30,9

3 Italy 1.76 TRL 10 0,6 9,4 8,7 8,7 28,1

4 United Kingdom

$2.149 TRL 10 2,1 7,9 8,4 8,4 26,3

5 Spain $1.368

TRL 10 -0,8 10 8,5 8,5 28,5

6 Netherlands $654.9 BL 6,54 1,2 8,8 9,8 9,8 25,14

7 Belgium 381 BL 3,81 0 10 10,2 10,2 24,01

8 Poland $690.1 BL 6,9 3,4 6,6 6,4 6,4 19,9

9 Austria $323.1 BL 3,23 0,4 9,6 10,1 10,1 22,93

10 Hungary 184.9 BL 1,84 2 8 7,4 7,4 17,24

11 Denmark 198.6 BL 1,98 1,3 8,7 9,8 9,8 20,48

12 Portugal $233.4 BL 2,33 -0,9 10 9,9 9,9 22,23

13 Greece $341 BL 3,41 1,2 8,8 9,6 9,6 21,81

14 Czech Republic $256.6 BL 2,56 1,1 8,9 6,8 6,8 18,26

15 Sweden $333.5 BL 3,3 -0,5 10 9,1 9,1 22,4

16 Finland $182.6 BL 1,82 0 10 8,2 8,2 20,02

17 Romania $255.4 BL 2,55 5 5 5,7 5,7 13,25

18 Ireland 176.9 BL 1,76 -1,7 10 7,6 7,6 19,36

19 Bulgaria $90.51 BL 0,9 1,6 8,4 7,7 7,7 17

20 Slovakia $115.7 BL 1,15 1,6 8,4 7,7 7,7 17,25

21 Slovenia $55.84 BL 0,5 0,8 9,2 8,6 8,6 18,3

22 Malta $9.831 BL 0,09 1,8 8,2 9,2 9,2 17,49

23 Luxembourg $38.37 BL 0,38 0,5 9,5 7,3 7,3 17,18

24 Cyprus $22.97 BL 0,2 0,9 9,1 6,3 6,3 15,6

25 Estonia $24.36 BL 0,2 -0,4 10 5,5 5,5 15,7

26 Lithuania $54.84 BL 0,54 4,2 5,8 6 6 12,34

27 Latvia 32.4 BL 0,32 3,3 6,7 6,3 6,3 13,32

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(C) EU Growth / Decline and Final Status

Sr Country

GROWTH

TOTAL SCORE =

100 Score STATUS

5 years sale

Score 0,5 M

SUB TOTAL.

MAX 30

Score

1 Germany 108028,0 30,0 30,0 82,53

Highly Potential Countries

2 France 32629,0 30,0 30,0 81,43

3 Italy 20428,5 30,0 30,0 77,91

4 United Kingdom 86405,6 30,0 30,0 76,33

5 Spain 4548,7 9,1 9,1 53,11 Moderate Potential

6 Netherlands 8429,3 16,9 16,9 49,49

Average Countries 7 Belgium 6918,4 13,8 13,8 44,05

8 Poland 4136,5 8,3 8,3 43,44

9 Austria 2730,0 5,5 5,5 35,90

Less Potential

10 Hungary 6119,8 12,2 12,2 35,53

11 Denmark 4455,3 8,9 8,9 35,08

12 Portugal 1587,9 3,2 3,2 32,33

13 Greece 905,5 1,8 1,8 31,77

14 Czech Republic 1743,5 3,5 3,5 29,81

15 Sweden 819,9 1,6 1,6 29,65

16 Finland 233,0 0,5 0,5 28,33

17 Romania 1984,4 4,0 4,0 26,82

18 Ireland 535,2 1,1 1,1 26,47

19 Bulgaria 718,1 1,4 1,4 25,82

20 Slovakia 111,5 0,2 0,2 22,96

21 Slovenia 17,3 0,0 0,0 22,52

22 Malta 74,3 0,1 0,1 21,69

23 Luxembourg 2,8 0,0 0,0 21,41

24 Cyprus 120,8 0,2 0,2 20,74

25 Estonia 78,0 0,2 0,2 19,72

26 Lithuania 290,9 0,6 0,6 18,31

27 Latvia 174,3 0,3 0,3 18,00

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(D) Interview with NATA company manager: This interview questions is asked from Mr. Muhammad Naseem, who is company manager. He

is responsible for all the activities which are done in the factory of NATA Surgical International.

He works as coordinator between local supplier and company. His job starts from taking order

from supplier, assuring that the instruments are manufacturing is according to the requirement of

supplier and finally delivery the order to supplier in time. He is also responsible to take in

account all the financial activities which are done in the company, like purchase of raw material,

distributing salary among employees etc. We also asked different things via telephone from him.

We are thankful to him for giving us his precious time for the interview.

1. When did NATA Company were established.

NATA Company established in 1969 by Mr. Muhammad Ashraf in city of Sialkot.

2. Which products does NATA manufacture?

NATA Surgical International is manufacturer of all kinds of hand-held surgical, dental and

beauty instruments.

3. How NATA is currently working?

We are currently working with local based suppliers of surgical instruments to foreign markets.

We get the manufacturing order and payment from local suppliers.

4. What is core competency of NATA Company?

NATA core competency is to manufacture hand-held surgical instruments, i.e. scissors, forceps,

etc.

5. How many employees does NATA Company have?

We have 13 permanent employees and 5 to 7 employees are work on temporary basis.

6. What is the Annual turnover of company?

The last year 2009, company total turnover was around Pakistan rupees 5 million to 6 million.

7. Why NATA wants to expand

The profit margin and local competition is the stimuli for NATA to expand its business and

remove the local intermediary who earns more than manufacturer.

8. What are the future prospects of company?

The company wants to supply directly to domestic hospitals and start exporting to international

market.

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9. What sort of difficulties might company face when expanding to Local?

For small company, it is very difficult to start supplying local hospitals because of very tough

criteria and corruption mafia. The bidder officers are bribed by the large companies and it

become difficult for small company to penetrate. Also the payment system is also very long of

government institutions, normally it take 3 to 4 months to get the whole amount from the

hospitals. It is also very difficult to find trustworthy customer in the domestic market.

10. What sort of difficulties might company face when expanding to International?

Finding trustworthy and long-term buyer in international market is the main difficulty which we

can foresee.

11. How NATA will manage its expenses if it goes local?

It depends upon how big supply order we get from hospital, if we get the order of supplying surgical

instruments more than our financial resources, we have our asset in shape of land and building. We will

sell them for meeting our order requirement.

12. How NATA will manage its expenses if it goes to Europe?

The same criteria we will adopt for managing expenses for exporting surgical instruments to Europe.

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