Nutritional Supplements in Singapore: A Strategic Reference, 2007
ICON Group International, July 2007, Pages: 237
How to Strategically Evaluate Singapore
Perhaps the most efficient way of evaluating Singapore 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 nutritional supplements 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 Singapore
This report provides a detailed overview of factors driving latent demand and accessibility for nutritional supplements in Singapore. Latent demand is largely driven by economic fundamentals specific to nutritional supplements. This topic is discussed in Chapter 2 using work carried out in Singapore 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 provided information. Latent demand only represents half of the picture. Chapter 2 also deals with micro-accessibility for nutritional supplements in Singapore. I use the term “micro” since the discussion is focused specifically on nutritional supplements.
Chapter 3 is a stand-alone report covering a proxy trade indicator that I have authored. Often, the amount of trade flowing into and out of a country is a strong indicator of trading partners, trade openness, and related latent demand. Chapter 3 is purely statistical in nature and covers provitamins and vitamins excluding medicaments. Although international trade for provitamins and vitamins excluding medicaments is not a direct measure of latent demand for nutritional supplements, it does provide a proxy indicator of general market conditions with respect to trade flows and trade openness in Singapore in a related category. The methodology for this report is discussed in the introduction of Chapter 3.
Chapter 4 is also a stand-alone report that I have authored. It covers proxy pro-forma financial indicators of firms operating in Singapore. I use the word “proxy” because the provided figures only cover a “what if” scenario, based on actual operating results for firms in Singapore. The numbers are only indicative of an average firm whose primary activity is in Singapore. It covers a vertical analysis of the maximum likelihood balance sheet, income statement, and financial ratios of firms operating in Singapore. It does so for a particular Standard Industrial Classification (SIC) code. That code covers “pharmaceutical preparations manufacturing”, as defined in Chapter 4. Again, while “pharmaceutical preparations manufacturing” does not exactly equate to “nutritional supplements”, it nevertheless gives an indicator of how Singapore compares to other countries for a proxy adjacent category along various dimensions.
Chapter 5 deals with macro-accessibility and covers factors that go beyond nutritional supplements. 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 Singapore:
Openness to Trade in Singapore
Openness to Direct Investment in Singapore
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 Chapter 5, which is a general overview of investment and business conditions in Singapore. Chapter 5 is also presented from the perspective of an American firm, though is equally applicable to most firms entering Singapore. 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 Singapore 1
1.3 Latent Demand and Accessibility in Singapore 3
2 NUTRITIONAL SUPPLEMENTS IN SINGAPORE 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 8
2.5 Key Suppliers 8
2.6 Prospective Buyers 9
2.6.1 Retail Consumers 9
2.6.2 Distributors 9
2.7 Accessibility: Market Entry 10
2.8 Market Issues and Obstacles 11
2.8.1 Custom Duties 11
2.8.2 Regulation 11
2.9 Trade Event 11
2.10 Key Contacts 12
3 TRADE INDICATORS: PROVITAMINS AND VITAMINS EXCLUDING MEDICAMENTS 13
3.1 Overview 13
3.2 Singapore and the World Market 14
3.2.1 Imports in Singapore in 2007 14
3.2.2 Exports from Singapore in 2007 15
3.3 Imports in Singapore: Provitamins and Vitamins Excluding Medicaments 16
3.3.1 Africa 16
3.3.2 Asia 17
3.3.3 Europe 24
3.3.4 N. America & Caribbean 35
3.3.5 Oceana 37
3.3.6 The Middle East 38
3.4 Exports from Singapore: Provitamins and Vitamins Excluding Medicaments 39
3.4.1 Asia 39
3.4.2 Oceana 49
3.4.3 The Middle East 51
4 FINANCIAL INDICATORS: PHARMACEUTICAL PREPARATIONS MANUFACTURING 52
4.1 Overview 52
4.1.1 Financial Returns and Gaps in Singapore 53
4.1.2 Labor Productivity Gaps in Singapore 56
4.1.3 Limitations and Extensions 56
4.2 Financial Returns in Singapore: Asset Structure Ratios 57
4.2.1 Overview 57
4.2.2 Assets - Definitions of Terms 57
4.2.3 Asset Structure: Outlook 60
4.2.4 Large Variances: Assets 61
4.2.5 Key Percentiles and Rankings 64
4.3 Financial Returns in Singapore: Liability Structure Ratios 79
4.3.1 Overview 79
4.3.2 Liabilities and Equity - Definitions of Terms 79
4.3.3 Liability Structure: Outlook 81
4.3.4 Large Variances: Liabilities 82
4.3.5 Key Percentiles and Rankings 85
4.4 Financial Returns in Singapore: Income Structure Ratios 96
4.4.1 Overview 96
4.4.2 Income Statements - Definitions of Terms 96
4.4.3 Income Structure: Outlook 99
4.4.4 Large Variances: Income 100
4.4.5 Key Percentiles and Rankings 103
4.5 Financial Returns in Singapore: Profitability Ratios 118
4.5.1 Overview 118
4.5.2 Ratios - Definitions of Terms 118
4.5.3 Ratio Structure: Outlook 120
4.5.4 Large Variances: Ratios 121
4.5.5 Key Percentiles and Rankings 124
4.6 Productivity in Singapore: Asset-Labor Ratios 139
4.6.1 Overview 139
4.6.2 Asset to Labor: Outlook 140
4.6.3 Asset to Labor: International Gaps 141
4.6.4 Key Percentiles and Rankings 144
4.7 Productivity in Singapore: Liability-Labor Ratios 159
4.7.1 Overview 159
4.7.2 Liability to Labor: Outlook 160
4.7.3 Liability and Equity to Labor: International Gaps 161
4.7.4 Key Percentiles and Rankings 164
4.8 Productivity in Singapore: Income-Labor Ratios 175
4.8.1 Overview 175
4.8.2 Income to Labor: Outlook 176
4.8.3 Income to Labor: Gaps 177
4.8.4 Key Percentiles and Rankings 180
5 MACRO-ACCESSIBILITY IN SINGAPORE 195
5.1 Executive Summary 195
5.2 Political Risks 195
5.2.1 Economic Relationship with the United States 195
5.2.2 Politics and the Business Environment 195
5.2.3 Political System 195
5.3 Marketing Strategies 196
5.3.1 Creating a Sales Office 196
5.3.2 Joint Ventures and Licensing Options 196
5.3.3 Use of Agents and Distributors 196
5.3.4 Hiring Local Counsel 196
5.3.5 Performing Due Diligence 196
5.3.6 Distribution Channel Options 197
5.3.7 Pricing Issues 197
5.3.8 Franchising Activities 197
5.3.9 Direct Marketing Options 197
5.3.10 Direct Selling Options 197
5.3.11 Selling Strategies 198
5.3.12 Advertising and Trade Promotion 198
5.3.13 Pricing Issues 199
5.3.14 Public Sector Marketing 199
5.4 Import and Export Regulation Risks 199
5.4.1 Trade Barrier Risks 199
5.4.2 Customs Regulations 199
5.4.3 Tariff Rates 200
5.4.4 Import Tariffs and License Requirements 200
5.4.5 Licenses Required for Imports 201
5.4.6 Entering Temporary Imports 201
5.4.7 Import Regulations for Health Supplements 202
5.4.8 Pharmaceuticals Imports Regulations 202
5.4.9 Labeling Issues 202
5.4.10 Restrictions on Imports 203
5.4.11 Warranty and Non-Warranty Repairs 203
5.4.12 Controls on Exports 203
5.4.13 Local Standards 203
5.4.14 Free Trade Zone Options 204
5.4.15 Adherence to Free Trade Agreements 204
5.5 Investment Climate 205
5.5.1 Openness to Foreign Investment 205
5.5.2 Limits on National Treatment and Other Restrictions 205
5.5.3 Conversion and Transfer Policies 206
5.5.4 Expropriation and Compensation 207
5.5.5 Dispute Settlement 207
5.5.6 Performance Requirements 207
5.5.7 Right to Private Ownership and Establishment 208
5.5.8 Intellectual Property Risks 208
5.5.9 Transparency of the Regulatory System 209
5.5.10 Capital Market Risks 210
5.5.11 Corporate Governance 210
5.5.12 Political Violence 210
5.5.13 Corruption 211
5.5.14 Bilateral Investment Agreements 211
5.5.15 OPIC and Other Investment Insurance 211
5.5.16 Labor 211
5.6 Trade and Project Financing 212
5.6.1 The Banking System 212
5.6.2 Foreign Exchange Control Risks 213
5.6.3 General Availability of Financing 213
5.7 Travel Issues 216
5.7.1 Local Business Practices 216
5.7.2 Travel Advisory and Visas 217
5.7.3 Work Week 217
5.7.4 Infrastructure for Conducting Business 217
5.7.5 Temporary Entry of Goods 218
5.7.6 Country Data 218
5.7.7 Transportation 219
5.8 Key Contacts 219
5.8.1 Important U.S. Government Contacts in the United States 219
5.8.2 Useful Contacts in the U.S. 220
5.8.3 Trade Associations and Chambers of Commerce 222
5.8.4 American Organizations in Singapore 224
6 DISCLAIMERS, WARRANTEES, AND USER AGREEMENT PROVISIONS 228
6.1 Disclaimers & Safe Harbor 228
6.2 Icon Group International, Inc. User Agreement Provisions 229
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