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Chongqing Peace Medical Corporation Ltd (A): Establishing A Foothold in China's Health-Care Environment  
Product Ref: 09/449C Company: Chongqing Peace Medical Corporation Ltd

Product Type: Case Industry: Health Care Equipment & Services
Pharmaceuticals & Biotechnology
Retail & Wholesale

Related Product(s): Teaching Note
Authors: Michael J. Fratantuono   Zhuoran Li   
Peace Medical Corporation Ltd ("Peace Medical"), headquartered in Chongqing, China, was founded in 2001 as a joint venture between the very large, state-owned Chongqing Medicine Company ("CMC"), which owns a 51% stake, and Jeff Jiang, the company president, who owns a 49% stake. Both Peace Medical and CMC are medical product supply companies, which are wholesalers that buy pharmaceutical products from manufactures and sell them to hospital-based pharmacies or retail drug stores. From the outset, the arrangement between CMC and Peace Medical has benefited both parties.

Jiang was only in his mid-30s when he co-founded Peace Medical. He belongs to a generation of business leaders who came of age during China's ongoing transition from an economy governed by central planning to one operating according to market processes. He has tried to base the success of his company on a strong organisational culture, good management techniques and a clear strategy¡Xan approach that stands in contrast to that of more elderly businessmen, who have learned to rely on political instincts as much as on business principles while governing state-owned organisations.

The case describes the reforms of China's health-care system introduced by the government. It also describes the evolution of Peace Medical over its first seven years of operations, and culminates by asking students to assess the company's strengths and possible weaknesses.
Functional Area : Strategy & General Management

Learning Objective: To help students better know about the ongoing transformation of China¡¦s economy and the features of China¡¦s contemporary health-care system through a description of some of the reforms implemented by the central government of China over a 20-year period.

To help students comprehend the challenges of successfully establishing and operating an organisation in the context of a multifaceted environment through a description of the various types of organisations in China¡¦s health-care system (eg, manufacturing companies, medical product supply companies, hospitals, drug store chains and wholesale outlets) and the relationships among them, and of the constraints and opportunities which confront Peace Medical.

To help students apply the notions of organisational culture, internal competencies and business-level strategies by making reference to the standard textbook treatments of strategic concepts and by matching these to the description of Peace Medical.

To help students analyse the way in which a young company can create an organisational culture, build an organisational structure, and formulate and begin to implement a strategy by examining the history and initial success of Peace Medical.

Length: 23 pages Country: China (People's Rep. of)

Pub. Year: 2009 Level of Difficulty: 2
This product type is available in the following language(s):      English
Related Information: N/A
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