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Chongqing Peace Medical Corporation Ltd (B): Charting a Strategy in China's Rapidly Changing Health-Care Environment  
Product Ref: 09/450C 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.

As of 2008, Peace Medical looks as though it will be a successful company for the long term. It is on a very strong growth trajectory, is financially sound, has accumulated an array of tangible and intangible assets, and has established good relationships with a range of other health-care system participants. Jiang has identified five related objectives for the coming years: first, to strengthen management processes in Peace Medical; second, to intensify sales in the Chongqing area; third, to establish his company's national network and increase sales beyond the Chongqing area; fourth, to become the distributor for several small- to mid-sized foreign businesses hoping to bring their non-generic pharmaceutical products into the China market; and fifth, to explore the possibility of forming a strategic alliance with a company to work in complementary fashion with Peace Medical.

The case briefly describes the seven year evolution of Peace Medical. It also describes the role of and pressures facing other types of stakeholders in China's medical products supply chain (manufacturers, hospitals, wholesalers, and so forth). It culminates by asking students to evaluate Jiang's five strategic objectives in light of the core competencies of Peace Medical and to identify possible synergies that might arise from pursuing those objectives.
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. Additionally, if the instructor so chooses, to help students apply the ideas associated with complexity theory and complex adaptive systems by making reference to concepts found in supplementary sources and by matching these to the description of the impact of reforms on "agents" in China・s health-care "ecosystem".

To help students synthesise concepts and evaluate alternatives by discussing the objectives articulated by Jiang, by imagining the core competencies that would be needed in order to achieve those objectives, by positing possible weaknesses in various departments of Peace Medical, and by speculating about possible new developments in China・s health-care system.

Length: 25 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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