Business Model and Development Strategy for Taiwan’s Biotech Companies
Date Issued
2015
Date
2015
Author(s)
Tseng, Hui-Chin
Abstract
Taiwan has targeted the biotech industry as a potential growth sector to take over from the declining electronics industry. However, a lack of competitiveness, due to low-cost OEM business models, means Taiwan has not been able to make any significant impact on the international stage. This thesis study primarily looks at biotech industry trends in the US and China to understand how their medical transformation policies have impacted the research and business models of Taiwan’s biotech vendors. In the US market, the largest suppliers with full industry value chain capabilities face a lack of sufficient resources, a patent cliff and bundled sales issues. This has led to a transformation in the US business model from a one-stop service to an industry value chain division model, so creating new business opportunities for Taiwan’s up- and mid-stream suppliers with regards to product innovation, specialty generics and research CMO. As for the China market, the key industry challenges include difficulties to obtain foreign investment approval from the CFDA, local protectionism, lax protection of Intellectual property rights, and complicated sales channel regulations. Taiwan’s biotech vendors thus need to collaborate with their local counterparts to do business in China. Moreover, Taiwan’s biotech vendors are typically small in scale and have sufficient resources, which is not conducive to competing globally. These enterprises can learn from China’s experience of using mergers and acquisitions to enhance their resource efficiency and technical innovation. The study’s conclusions and recommendations for Taiwan’s biotech industry are to adopt US expertise and its development business model; take a wider view of the global business ecosystem; monitor and understand the development needs of China’s emerging market; understand local protection measures; pursue cross-Strait collaboration and cooperation; expand biotech industry scope to become the upstream supplier in the industry value chain, participate in product innovation and research, and provide professional CMO services management for specialty generics and research.
Subjects
biotechnology
pharmaceuticals
medical devices
industry value chain
business ecosystem
business model
Type
thesis