Medical Equipment and Supplies in Finland: A Strategic Reference, 2006
ICON Group International, July 2007, Pages: 200
How to Strategically Evaluate Finland
Perhaps the most efficient way of evaluating Finland is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance to medical equipment and supplies are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).
Framework for Prioritizing Countries
Demand/Market Potential Driven Firm
Relative Accessibility
Accessibility/Supply Averse Firm
In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market - neither a market-driven nor a cost-driven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities (e.g. a Canadian firm may have higher accessibility in Canada than a German firm).
Latent Demand and Accessibility in Finland
This report provides a detailed overview of factors driving latent demand and accessibility for medical equipment and supplies in Finland. Latent demand is largely driven by economic fundamentals specific to medical equipment and supplies. This topic is discussed in Chapter 2 using work carried out in Finland on behalf of American firms and authored by the United States government (typically commercial attachés or similar persons in local offices of the U.S. Department of State). I have included a number of edits to clarify the information provided. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for medical equipment and supplies in Finland. I use the term “micro” since the discussion is focused specifically on medical equipment and supplies.
Chapter 3 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Finland. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Finland. The numbers are only indicative of an average firm whose primary activity is in Finland. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Finland. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “surgical and medical instruments and apparatus”, as defined in Chapter 3. Again, while “surgical and medical instruments and apparatus” does not exactly equate to “medical equipment and supplies”, it nevertheless gives an indicator of how Finland compares to other countries for a proxy adjacent category along various dimensions.
Chapter 4 deals with macro-accessibility and covers factors that go beyond medical equipment and supplies. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Finland:
Openness to Trade in Finland
Openness to Direct Investment in Finland
Local Marketing and Entry Strategy Alternatives
Local Human Resources
Local Risks
Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are covered in the Chapter 4, which is a general overview of investment and business conditions in Finland. Chapter 4 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Finland. This chapter is also authored by local offices of the U.S. government, as is Chapter 2. Likewise, I have included a number of edits to clarify the provided information as it relates to the general strategic framework mentioned earlier.
1 INTRODUCTION & METHODOLOGY 1
1.1 What Does This Report Cover? 1
1.2 How to Strategically Evaluate Finland 1
1.3 Latent Demand and Accessibility in Finland 3
2 MEDICAL EQUIPMENT AND SUPPLIES IN FINLAND 5
2.1 Latent Demand and Accessibility: Background 5
2.2 Latent Demand: Market Composition 5
2.3 Latent Demand: Market Data 6
2.4 Latent Demand: Leading Segments 6
2.5 Prospective Buyers 7
2.6 Accessibility: Market Entry 7
2.7 Import Climate 7
2.8 Accessibility: Distribution Strategies 8
2.9 Market Issues and Obstacles 8
2.9.1 Cost-Efficiency Ratio 8
2.9.2 Customer-Supplier Relationship 8
2.9.3 Company Image 8
2.9.4 Service and Maintenance 9
2.10 Accessibility: Local Production 9
2.11 Accessibility: Foreign Entrants 9
2.12 Key Contacts 9
3 FINANCIAL INDICATORS: SURGICAL AND MEDICAL INSTRUMENTS AND APPARATUS 11
3.1 Overview 11
3.1.1 Financial Returns and Gaps in Finland 12
3.1.2 Labor Productivity Gaps in Finland 15
3.1.3 Limitations and Extensions 15
3.2 Financial Returns in Finland: Asset Structure Ratios 16
3.2.1 Overview 16
3.2.2 Assets - Definitions of Terms 16
3.2.3 Asset Structure: Outlook 19
3.2.4 Large Variances: Assets 20
3.2.5 Key Percentiles and Rankings 23
3.3 Financial Returns in Finland: Liability Structure Ratios 38
3.3.1 Overview 38
3.3.2 Liabilities and Equity - Definitions of Terms 38
3.3.3 Liability Structure: Outlook 40
3.3.4 Large Variances: Liabilities 41
3.3.5 Key Percentiles and Rankings 44
3.4 Financial Returns in Finland: Income Structure Ratios 57
3.4.1 Overview 57
3.4.2 Income Statements - Definitions of Terms 57
3.4.3 Income Structure: Outlook 60
3.4.4 Large Variances: Income 61
3.4.5 Key Percentiles and Rankings 64
3.5 Financial Returns in Finland: Profitability Ratios 79
3.5.1 Overview 79
3.5.2 Ratios - Definitions of Terms 79
3.5.3 Ratio Structure: Outlook 81
3.5.4 Large Variances: Ratios 82
3.5.5 Key Percentiles and Rankings 85
3.6 Productivity in Finland: Asset-Labor Ratios 100
3.6.1 Overview 100
3.6.2 Asset to Labor: Outlook 101
3.6.3 Asset to Labor: International Gaps 102
3.6.4 Key Percentiles and Rankings 105
3.7 Productivity in Finland: Liability-Labor Ratios 120
3.7.1 Overview 120
3.7.2 Liability to Labor: Outlook 121
3.7.3 Liability and Equity to Labor: International Gaps 122
3.7.4 Key Percentiles and Rankings 125
3.8 Productivity in Finland: Income-Labor Ratios 138
3.8.1 Overview 138
3.8.2 Income to Labor: Outlook 139
3.8.3 Income to Labor: Gaps 140
3.8.4 Key Percentiles and Rankings 143
4 MACRO-ACCESSIBILITY IN FINLAND 158
4.1 Executive Summary 158
4.1.1 Nokia - A Big Company in a Small Country 158
4.1.2 Finnish-U.S. Trade 158
4.1.3 Finland: A Springboard to Russia and the Baltic States 158
4.2 Economic Fundamentals and Dynamics 159
4.2.1 Government Intervention Risks 159
4.2.2 Balance of Payments Issues 159
4.2.3 Infrastructure Development 160
4.3 Political Risks 160
4.3.1 Economic Relationship with the United States 160
4.3.2 The Political System 161
4.4 Marketing Strategies 161
4.4.1 Creating a Sales Office 161
4.4.2 Creating a Joint Venture 161
4.4.3 Agents and Distributors 161
4.4.4 Checking Bona Fides 162
4.4.5 Distribution Channel Options 162
4.4.6 Selling Strategies 163
4.4.7 Pricing and Licensing 163
4.4.8 Advertising Options 163
4.4.9 Trade Promotion 164
4.4.10 Public Sector Marketing 165
4.5 Import and Export Regulation Risks 166
4.5.1 Adherence to Free Trade Agreements 166
4.5.2 Trade Barrier Risks 166
4.5.3 Tariff Rates 166
4.5.4 Restrictions on Imports 167
4.5.5 Local Standards 167
4.5.6 Labeling Issues 169
4.5.7 Controls on Exports 170
4.5.8 Import Tariffs and License Requirements 170
4.5.9 Customs Regulations and Contact Information 171
4.5.10 Entering Temporary Imports 171
4.5.11 Additional Trade Issues 171
4.5.12 Free Trade Zones and Warehouses 172
4.6 Investment Climate 172
4.6.1 Openness to Foreign Investment 172
4.6.2 Conversion and Transfer Policies 173
4.6.3 Expropriation and Compensation 173
4.6.4 Dispute Settlement 173
4.6.5 Performance Requirements and Incentives 173
4.6.6 Right to Private Ownership and Establishment 174
4.6.7 Intellectual Property Risks 174
4.6.8 Transparency of the Regulatory System 175
4.6.9 Capital Market Risks 175
4.6.10 Political Violence 175
4.6.11 Corruption 175
4.6.12 Bilateral Investment Agreements 176
4.6.13 OPIC and Other Investment Insurance 176
4.6.14 Labor 177
4.7 Trade and Project Financing 177
4.7.1 The Banking System 177
4.7.2 Foreign Exchange Control Risks 177
4.7.3 General Financing Availability 178
4.7.4 Financing Export Strategies 178
4.7.5 Types of Available Export Financing and Insurance 178
4.7.6 Financing Projects 180
4.7.7 Banks with Correspondent Banking Arrangements 180
4.8 Travel Risks 180
4.8.1 Local Business Practices 180
4.8.2 Visa Requirements and Travel Information 180
4.8.3 Infrastructure for Conducting Business 181
4.8.4 Country Data 182
4.9 Key Contacts 182
4.9.1 U.S. Embassy Trade Personnel 182
4.9.2 Washington-Based U.S. Government Contacts 183
4.9.3 Chambers of Commerce 184
4.9.4 World Trade Center in Helsinki 185
4.9.5 Trade Associations 185
4.9.6 Finnish Government Agencies 187
4.9.7 Market Research Firms 189
4.9.8 Commercial Banks 189
5 DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS 191
5.1 Disclaimers & Safe Harbor 191
5.2 Icon Group International, Inc. User Agreement Provisions 192
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