Final Business Policy

Doctors Surgical PVT LTD

Business policy

Doctors Surgical PVT LTD

Submitted to:Professor F. A. Fareedy

Submitted by:Maryam Khalid - 13P01436MBA II B

29-06-2015

ContentsExecutive Summary4Introduction of firm5Vision5Mission5Objectives5Products and Services6Production Process7Suppliers8Major Customers8Organizational structure9Marketing10Industry Analysis11History of Surgical industry of Sialkot11Surgical Industry12Export Potential Markets15PEST Analysis16Political and governmental Factors16Economic Factors16Social and cultural factors17Technological Factors17Models19Porters 5 Forces model19Bargaining power of suppliers19Bargaining Power of buyers20Threat of substitutes20Threat of Entrants20Rivalry among competitors20SWOT Analysis22Strengths22Weaknesses23Opportunities23Threats23Internal environment analysis (IFAS)25External environment analysis (EFAS)26Competitive Profile Matrix (CPM)27TOWS Matrix28Business Plan30Strategy Implementation30Product31Price31Market Analysis32Sales and Revenue Forecast33Conclusion and Recommendations34Bibliography36

Executive SummaryThe objective of the report was to gather information about the surgical company, Dr surgical and the industry as a whole to see the performance of the company and trends in the local and international market. As the ultimate goal of every business is to grow, the basic idea was to propose and devise a strategy for the company which can help it to grow and expand and help it gain competitive edge over the competitors.The study was conducted through the use of primary and secondary research. Interviews with the companys management provided fruitful insights regarding companys current policies and procedures. The financial performance was in favour of the company but somehow the growth was stagnant as the prevailing markets matured. After analysing companys potential and existing market scenario it was suggested that the company should enter US market, although the market is very competitive but the company has a lot of potential. The suggested mode of entry was joint venture. As the company produces good quality products but faces difficulty in marketing and branding the product, therefore the partner in joint venture will help carrying out these activities.

Introduction of firmDoctors surgical is one of the oldest manufacturers of dental and surgical instruments in Pakistan. It operates as a medium size unit. Doctors surgical was founded by Chaudhary Allahdin in 1950. He along with his 2 partners decided to produce high quality surgical instruments and sell it in Middle East. Company have grown over time and now sells its instruments in various parts of the world which includes: Italy, Germany, USA, UK, Saudi Arabia, Egypt and Dubai. 80% of its exports are catered to Middle East. It has a workforce of around 100 people. It employees specialist and manufacture high quality instruments. It pays keen attention on quality and produces high quality goods in reasonable prices. VisionTo be a valued brand name associated with manufacturing of high quality surgical and dental instruments in Pakistan. MissionDoctors surgical mission is to be the best provider of surgical, dental and beauty instruments in Pakistan. To use high quality technology and specialised labour to produce high quality medical related instruments and make them available worldwide. Objectives1. To produce high quality dental and medical instruments2. To expand further in other instruments like beauty instruments3. To produce eye instruments that are extremely technical and difficult to make4. To export increase its exports in Europe as well

Products and ServicesCompany has wide variety of products available. It offers its services in various categories and produces high quality products at reasonable prices to its competitors. Company basically deals with 3 types of products. 1. Surgical Instrumentsa. Surgical Instrumentsb. Ophthalmology Instruments2. Dental and Eye Instruments3. Beauty Instrumentsa. Manicure Instruments4. Utility Scissorsa. Tailor ScissorsThe list of the products is given in Figure 1.

Production ProcessThe following below is the production process of the company:

All raw materials are first inspected and then stored in the warehouse. Raw material comes in the form of raw shaped scissors and forceps. Then once when the company receives any order raw material are taken out of the warehouse. They are shaped and trimmed and punching takes place to make them in the shape desired by the customer. Then the instruments are heated and a hardness test is performed on them. Then they are grinded and fixed properly. Then they are polished and cleaned properly through Ultra Sonic chemical. This process is performed through machines. Instruments are added in the machine and they are cleaned by it. The labour then dries it and put stamps on them. Goods are inspected and then the female and male workforce packs the instruments and they are ready to be loaded in the vehicles. After they are loaded the products are sent to a cargo service firm. The cargo company then sends the goods to dry port and then they are sent to Karachi to ship them abroad. The buyer or customer picks the goods from the sea port.

SuppliersRaw material used in the process are: Grinding Wheels Satin Finishing Wheels Compositions and Salts Flat rolled stainless steel sheets Electroplating polishes Grinding belts Electro polishing chemicalsStainless steel and these raw materials are acquired from various suppliers in Gohdpur, Sambrial and Sialkot. Suppliers are paid 50% in advance when we place order. Rest is paid when he order is delivered and inspected by the manager. Suppliers are unreliable. They are not able to deliver the goods on time which result in delay in the production process and then ultimately in the delivery of instruments. Most of the time deliveries are atleast 5-10 days late. Some packaging material like plastic boxes and leather boxes are imported from China. Major Customers Doctors Surgical major customers are located in Dubai, Saudi Arabia, Egypt, Turkey and Germany. It also has various customers in UK, USA and other parts of Europe. Its major customers are suppliers who further supply to other companies. Its a B2B business. It is also sold to various hospitals, pharma companies and beauty shops in these countries. Company packages the product under its name with the stamp of made in Pakistan. Companys loyal customers usually pay 1-2 months late. They are allowed by the company to pay late; as they want to maintain long term relationship with the customer. New customers are usually asked to pay 50% when they order and 50% when the goods are sent to the cargo company.

Organizational structureThe organizational structure of the company is as follows:

Doctors surgical employees 70 employees. It has 1 sales manager which is responsible for going to exhibition and marketing its products. It has 1 senior accounts manager and 1junior accounts manager. The senior accounts manager takes international orders, process them and reply back to the customers. The junior manager is responsible for maintaining the internal accounts of the company and for paying the salaries of lower level employees along with paying the suppliers. Production department is headed by 1 production manager which is responsible for 30 employees in this department. Packaging department has 1 senior manager and is responsible for 30 employees. Company follows a strict autocratic culture. No formal JOD are present. No quotas are assigned to employees. For production process skill full employees are required. Old employees are retained in the organization. Usually no skills are required by packaging employees. MarketingCompany markets its product in various ways. It sends catalogues to its customers whenever they demand it. Company maintains a catalogue which includes the details of all the products offered by the company. It also mentions the size, variations and pictures of these instruments. The company also markets its products through emailing the prospect customers. It emails its catalogues to customers and give them price quotation. Company also participates in various exhibitions in Dubai, Germany and USA related to dental, surgical and beauty instruments. Company employees a sales manager to exhibit their products in these exhibitions. A lot of new and existing customers place orders in these exhibitions.

Industry AnalysisHistory of Surgical industry of SialkotSurgical industry of Sialkot is extremely old and has a history of almost 100 years. Some 100 years back few British doctors came to Sialkot for repairing their surgical instruments from specialised employees in Sialkot. Surgical instrument manufacturing industry of Sialkot originated in 1940s. This industry was established in 19th century, when American Mission hospital in Sialkot repaired its medical instruments from the workers in Sialkot. These workers skilfully repaired the instruments that were imported, this lead to development of this industry and started to export the goods abroad. To help the local industry Bristishers established Metal industries Development Centre in 1941 (Ali, Mehmood, & Hussain).This sector produces various dental and medical instruments. It contributes greatly to the exports of Pakistan. It exports to various parts of world including USA, Germany, India, Italy, UK, Middle East and many more. After independence Sialkot had 17 registered surgical instruments manufacturers (Ali, Mehmood, & Hussain). This industry gets support from Sialkot Chamber of Commerce and Sialkot Instruments Manufacturing Association of Pakistan. In 1958 the Surgical Instrument Manufacturing Association of Pakistan was incorporated which safe guarded the interests of the industry. The Surgical Association since than is regularly playing a central role in addressing issues at the Government level, nominating trade delegations and participants for trade fairs and exhibitions, handling inter-industry issues and representing the industry at various local and international forums. Surgical association consists of 3,500 member firms, more than 150,000 workers engaged in the production and exporting of surgical instruments abroad. The value of exports of surgical instruments for the year financial year 2013-2014 is US$333.5 million (SIMAP website).

Surgical IndustryOver 99% of the surgical manufacturing units are located in Sialkot. The Surgical Industry represents manufacturers and exporters of Surgical Instruments, Dental Instruments, Veterinary Instruments, Pedicure and Manicure Items, Tailor Scissors, Barber Saloon Scissors and Beauty Saloon instruments. About 1900 small and medium Surgical Units with labour force ranging from (10-500) are producing surgical instruments through the workforce of about 100,000. The industry is manufacturing and exporting both disposable and reusable instruments which constitute at 60% and 40% respectively of its total exports of surgical industry. About 80% of Sialkots surgical instruments are exported to United States, Germany, United Kingdom, France, Italy, Dubai, Japan, and Netherlands and 20% to rest of the world (Punjab Portal).

Sourec: trademap.com

This sector comprises of 2300 companies. The industry produces an average of 150 million pieces a year with estimated value of around Rs. 22 billion (Medicine Pakistan website). 95% of the production is exported and rest is sold to hospitals and drug companies in Pakistan. This industry produces over 2000 different instruments from imported stainless steel. These instruments are used by doctors, surgeons throughout the world and are considered second in quality to Germany, the global leader in this field. Surgical goods of worth US$23.7 million were exported in July 2011 as compared to US$20 million in July 2010. Federal Bureau of statistics (FBS) reported surgical and dental exports as US$24.5 million in June 2011.

Source: trademap.orgThis industry is very competitive. These instruments are better in quality than what China makes but a bit less in quality as compared to France and Germany. This industry faces various challenges as emerging technologies are replacing conventional ones. The firms in Sialkot dont use technology and automated process which result in les consistency in quality. Due to emergence of new competitors India, China and Malaysia the industry might suffer. Though they produce low quality but still they have very lower prices as compared to Pakistani firms offer. Moreover, this market is becoming highly regulated. This industry is losing its market share due to lower quality. There is lack of regulatory framework. Raw materials are not available and some it have to be imported which results in higher costs. Moreover, many companies focus on low-tech, low quality, low value products which results in lower value addition and thus lower earnings. Due to terrorism Pakistan have bad name in the international market. Absence of R&D departments in the firms and lack of brand name results in lower quality products.

The table below shows the exports statistic in surgical instruments:

Source: SIMAP website

For more information on industry please refer to Appendix B.

Export Potential MarketsThe matrix below shows the existing export markets and potential export market. There is a lot of potential in Europe, America, Middle East, Africa and Australia.

PEST AnalysisPolitical and governmental Factors1. Government of Pakistan has increased the import duty on steel from 15% to 18% thus increasing the cost of the final product. Import duties on steel keeps on fluctuating and thus the final price of the product also fluctuates. Most of the steel is imported from abroad thus this results in higher cost for suppliers and thus this transfers as higher raw material cost for the manufacturer.2. In order to train and provide skills TEVTA (Technical Education and Vocational Training Authority) has been established by the government. This body provides training to the workers so that their skills can be improved. The skills of the employees are polished so that they can produce high quality instruments.3. Pakistani exporters often face difficulty in getting visa from international embassies because of security threats. After 9/11 all Pakistani exporters have to go through hectic process to get visa. Pakistans image abroad have become bad and people are not willing to trust them. Nonetheless many of the exporters have managed to get visa due to their good reputation of quality and delivery of products in designated time.4. Establishment of surgical association has created opportunities for surgical manufacturing companies by providing a platform for them. It was established in 1958 to help the exporters export their products abroad. It gives information to the firms about the exhibitions, prospective customers and companies and help them to build their own brand image. 5. Due to change in political leadership exporters face a lot of issues as the Nawaz government supports industries whereas other governments impose heavy taxes on them. This results in tax evasion by these firms.Economic Factors1. Increase in energy cost such as oil, electricity and gas leading to increase in the cost of production. The price of these utilities keeps on increasing which results in higher cost of production. Companies cant change their price quotation everyday thus they suffer losses. Though the margins in the surgical industry are higher but they are decreased due to increase in the price of these utilities. 2. Changing foreign exchange rate cause fluctuations in the earning of manufacturers. Pakistans economy is considered as unreliable and its currency keeps on fluctuating. These fluctuations increases the cost of raw materials and thus lower the profits. On the other hand these fluctuations can result in lower prices of the products and thus lower profits.3. Increase in the service charges by the bank has also proved to be a problem for the industry. Most of the exporters cant get visa and they cant go abroad. Thus they have to take orders from Pakistan and then send them through shipments, they receive their payments through bank. Bank charges high amount for converting the currency which results in lower prices. Banks also tend to give you lower exchange rate so that they can have maximum profits and as a result the exporter suffers. Social and cultural factors1. Companies in Sialkot are run by family owners and they do not wish to expand and improve their operations significantly. There is an issue of succession planning. These companies make sure that their children run their companies and once if they are unable to do so then the company dies. They have limited financial resources. And some of them dont take loan as they consider as haram.2. As people are becoming more health aware, the trend is changing more towards disposable instruments. Now the demand for disposable instruments are increasing. Most of the industries in Sialkot are making surgical instruments that are not disposable. This can pose threat to this industry in future.Technological Factors1. Lack of skilled labour in the surgical industry. Though the industry is flourishing and have a good future but there is lack of skilled employees. Old employees have died and new generation dont have these skills. Moreover, there is also lack of knowledgeable employees to run the organization. These companies are run by family members and they arent interested in improving productivity. They just want their businesses to keep on running and dont want to invest money in technology and additional research and development to improve the production process.2. Reluctance of manufacturing companies to use advance technology in the manufacturing of instruments. They think that their skills are sufficient and they completely ignore the fact that technology will help them in their production process. They dont want to invest in technology because they are unaware of the benefits of machines.

ModelsPorters 5 Forces model

Local + foreignVast pool of suppliersAvailability of products

Large number of small and large companiesCompetitors use technology Competitors have strong brand name

Limited suppliersUnreliable suppliersStrong powerDisposable instrumentsChanging trendsNew products in the categoriesStill lot of opportunityThreat from established companiesHow to attract customers?

Bargaining power of suppliersThe industry consists of limited suppliers. There is a shortage of capable and compete suppliers. Firstly Suppliers of raw material do not meet the expectation of manufacturers and for this reason often some of these manufacturers have to import raw material which automatically increases the cost of the product. However not all manufacturing companies are in a position to import raw material. Higher switching cost also adds to the position of suppliers being stronger. It is not easy for buyers to switch quickly to other local and international suppliers because of credibility and time constraints. Higher switching cost, demand being more than supply and limited number of suppliers result in strong bargaining power of suppliers.Bargaining Power of buyersBuyers of the surgical instruments include local and foreign customers. They are basically other companies that sell to several hospitals and doctors. Buyers in the foreign market have a relatively stronger position because there are a number of suppliers in Pakistan as well as other foreign markets. These customers can choose to place order from a vast pool of suppliers. Switching costs are not very high because order is placed once the customer has been made satisfied through sending samples. Moreover the transaction is conducted banks. Thus easy availability of products and not very high switching costs makes the position of buyers stronger.Threat of substitutesThe nature of surgical instrument industry is such that continuous technology and innovation takes place. Medical industry constantly comes up with products that are more innovative. If manufacturers do not adapt to the changing market they may face the threat of new technology replacing the older. For instance a disposable instrument which is a direct substitute to the normal instruments is now the demand of several customers. If companies do not adapt to the new changes, there is a threat that the substitute products will replace the companys products. Moreover there is more than one type of product in each category. For example surgical gloves come in various types. Thus introduction and presence of new products in the category increases the chances for customers to switch to new products.Threat of EntrantsThere is still a lot of room of opportunity in the surgical industry. Companies can start on a small scale. Government has setup many institutions that help support new business ventures. However there are certain barriers for new comers which include difficulty of attracting customers and pulling them out from large suppliers. Creation of surgical firm requires higher initial investment. Heavy value added tax on surgical instrument is another threat to new entrants.Rivalry among competitorsLarge number of manufacturing companies in the surgical industry makes the competition intense locally as well as internationally. Competitors in the foreign market are deeply involved in continuous innovation of technology and improving product and process controls. Pakistani companies however lack behind in this regard. Another major issue is that competitors in the foreign market have established a strong brand whereas many Pakistani exporters do not sell their products under their own brand name. Thus foreign competitors are able to differentiate their product from others.

SWOT Analysis

Weaknesses 1. Lack of branding and marketing2. Low employee motivation.3. Less emphasis on growth and expansion as compared to actual potential.4. Less investment on new technology and innovation Strengths 1. Raw material Quality2. Good financial position3. Superior skills and experience of top management4. Know-how of several international markets.

Opportunities1. Creation of surgical institutions to support companies.2. Higher demand for good quality and branded products.3. Great potential in international markets.4. Material bank created by government Threats1. Changing technology and new innovations.2. Rise in taxes by the government3. Prioritization of products selling under well established brands.4. More opportunities for those having strong distribution channels.

StrengthsThe company uses fine quality of steel which is imported by its suppliers from abroad. Doctors Surgical never compromises on quality and demands high quality of steel and instruments form its suppliers. Company also imports some high quality packaging material from abroad. Financial position of the company is also good. Its able to pay back its suppliers on time and it pays its employees on time. Owner of the company is old and has enough knowledge and skills in the instruments. The management of the company which includes senior managers and junior mangers they are educated. They are employed in the company for more than 20 years thus they have the knowledge and skills to produce high quality surgical and dental instruments. Company is old and is operating in this sector for more than 50 years. The management have knowledge about the industry. They know the markets that have high export potential. The sales manager of the company is also experienced and knows that when and where to exhibit its products and to gain higher margins.WeaknessesDespite of having an experience of 50 years in the industry company is unable to brand its products. Instead of selling their products directly to the potential customers they sell them to different companies who then sell them to hospitals and drug companies. The employees of the company are not motivated. They dont work hard. No quotas are given to them. They are not motivated to increase their pay as the rewards are linked to performance. Some of them take long leaves, this happens in packaging and production department. Company places less emphasis on growth and expansion as compared to actual potential. Despite having a lot of potential in this industry the company doesnt grow. This is because of the lack of investments. The owner dont want to take debt. Moreover, company is not able to invest in technology and innovation. The owner is old and dont know the benefits yielded by technology. OpportunitiesThis industry has a lot of potential. Government is also supporting this industry by making Surgical institutions like SIMAP and Sialkot chamber of commerce also supports it. These institutions help exporters to know their potential markets. TVDA was also established to help employees gain skills. The demand for surgical goods is increasing over the period of time. This is because of the rise in the disposable income worldwide that have led to people becoming more heath conscious. Now people spend a lot on their heath to extend their lives. These customers are demanding high quality as well as branded products. There is still a lot of potential in international markets. The rise in medical tourism industry in China and India has also led to higher demand for surgical goods. Government of the company has also remained supportive by opening material bank in the city to support these industries. ThreatsIndustry in Sialkot is facing threat from the high quality surgical instruments from Germany and Malaysia. Companies in these countries employee technology and continuously improve the production system to reduce their costs and improve quality. They continuously invest in research and development program to introduce new instruments to help doctors, surgeons and veterans. Due to change in the governments the taxes keep on fluctuating. Companies have to pay huge taxes when importing raw material from abroad. The sales tax is also increasing which results in lower profits for these industries. Companies operating in Sialkot dont have any international established brand names. There are only few companies that are branded and produce high quality goods. The others are not branded and thus they receive lower price for the customers. Companies that have strong distribution channels abroad in the form of joint venture or show rooms abroad they have more opportunity. These companies are able to enjoy higher sales and revenues as they are more near to customers and the risk of default is also lower. Small companies dont have these opportunities and thus they remain small and are not able to compete with these large companies.

Internal environment analysis (IFAS)Internal factorsWeightRatingWeighted Score

Strengths

Raw material Quality

0.1540.6

Good financial position0.130.3

Superior skills and experience of top management0.0530.15

Know how of several international markets.

0.130.3

Weaknesses

Lack of branding and marketing0.1520.3

Low employee motivation.0.0530.15

Less emphasis on growth and expansion as compared to actual potential.0.1520.3

Less investment on new technology and innovation0.2530.75

Total12.85

The score came out to be 2.85 which is slightly higher than above average. The company still needs to come up with new strategies that can benefit from their strengths and minimize their weaknesses.

External environment analysis (EFAS)External factorsWeightRatingWeighted Score

Opportunities

Creation of surgical institutions to support companies.0.230.6

Higher demand for good quality and branded products.0.1520.3

Great potential in international markets.0.130.3

Material bank created by government0.0530.15

Threats

Changing technology and new innovations.0.1520.3

Rise in taxes by the government0.130.3

Prioritization of products selling under well established brands.0.1520.3

More opportunities for those having strong distribution channels.0.120.2

Total12.45

The total weighted score for the company came out to be 2.45 in the above table. This highlights that the company is managing their threats a little below average. Dr surgical should focus on addressing serious threats with the opportunities prevailing in the market in order to reduce the overall impact.

Competitive Profile Matrix (CPM) Dr SurgicalHilbro Credible Surgical

Critical Success FactorsWeightRatingScoreRating ScoreRatingScore

Product Quality0.254151.2541

Marketing and Branding0.2020.440.830.6

Market Share0.1030.340.430.3

Management expertise 0.1030.340.430.3

Price competitiveness0.1530.4540.620.3

Technology and innovation0.2030.640.830.6

Total13.054.253.1

Analysis of CPMThe analysis highlights that Hilbro as a competitor is stronger in all the success factors as compared to Dr Surgical. There is a dire need for the company to focus on marketing and branding as it is lacking way behind than its competitors. Hilbro has strong marketing base and it sells its product under its own brand name in international markets. Dr surgical do not sell all its products under its own brand name in international markets. As the company produces good quality product it can capitalize on this strength and market it so that it has a distinctive place. Hilbro has joint ventures in USA and Germany whereas Dr surgical has entered all international markets only through exports. Dr surgical is performing good as far as product quality is concerned but it needs to focus more on technology and innovation so that it can adapt with the changing trends. Hilbro as a competitor invests more on technology as compared to rest of the competitors. The company invests in machinery and technology which helps it to increase efficiency and quality and reduce costs.TOWS Matrix IFAS

EFASStrengths5. Raw material Quality6. Good financial position7. Superior skills and experience of top management8. Know-how of several international markets.

Weaknesses5. Lack of branding and marketing.6. Low employee motivation.7. Less emphasis on growth and expansion as compared to actual potential.8. Less investment on new technology and innovation

Opportunities

1. Creation of surgical institutions to support companies.

2. Higher demand for good quality and branded products.

3. Great potential in international markets.4. Material bank created by government

Creation of surgical institutions will provide knowledge and access to quality raw material.( S1,O1)

Use knowledge and experience to tap and exploit new markets having great potential (S4,O3)

Using marketing functions to sell under own brand name in order to create more demand and satisfaction for customers.(W1,O2)

Threats

1. Changing technology and new innovations.

2. Rise in taxes by the government

3. Prioritization of products selling under well established brands.

4. More opportunities for those having strong distribution channels.

Company can enter international markets using direct methods and establish a good distribution system (S4,T4)

More investment in innovation in order to keep pace with changes in technology.(W4,T1)

Emphasize on growth and expansion by solidifying presence in international markets and having strong channels of distribution.(W3,T4)

Business PlanStrategy ImplementationThe new strategy will be to serve US market by offering arthroscopic medical devices to orthopaedic surgeons for treating knee injuries. The idea is to tailor the product according to the needs of local orthopaedic surgeons. The company has been previously focusing on B2B selling but the strategy would change for US market as the company would target direct users of the product. This will allow the company to somehow tailor the product according to the needs of its customers. The company will enter US market through joint venture with a US company. As the company lacks in marketing and branding activities but produces high quality products, this strategy will help it to penetrate into the US market.Selection of US market was done after analysing the US and European market. The overall score for US market came out to be high leading to the selection of this market for introducing new products.

Selection of US marketStrategic Alliance USAEuropean Market

FactorsWeightASTASASTAS

Opportunities

Creation of surgical institutions to support companies.

0.2030.630.6

Higher demand for good quality and branded products.

0.1530.4540.6

Great potential in international markets.

0.140.430.3

Material bank created by government

0.0540.240.2

Threats

Changing technology and new innovations.

0.1520.320.3

Rise in taxes by the government

0.120.220.2

Prioritization of products selling under well established brands.

0.1520.320.3

More opportunities for those having strong distribution channels.

0.130.320.2

Strengths

Raw material Quality

0.1540.640.6

Good financial position

0.140.440.4

Superior skills and experience of top management0.0530.1530.15

Know how of several international markets.

0.140.440.4

Weaknesses

Lack of branding and marketing

0.1530.4520.3

Low employee motivation.

0.0530.1530.15

Less emphasis on growth and expansion as compared to actual potential.

0.1530.4530.45

Less investment on new technology and innovation

0.2520.520.5

Total4.584.50

ProductThe new products introduced for US market will be drill saw and bone cutting forceps. These products will help orthopaedic surgeons improve upon surgical techniques and deliver better patient outcome. Drill saw is an electrically operated device that is used to drill holes in the bone during the surgery.Intellectual PropertyThe company will have to file a patent application with the United States patent and trademark office.PriceThe price structure is based on industry standards. The products are sold to cover companys operational expenses and to generate consistent revenues at the price which is negotiable with the customers.Market AnalysisMarket potential and size The market for surgical instruments market in US has performed very well in the last five years. In the upcoming five years, industry revenue is forecasted to grow in line with the rising per capita income. The market is mainly driven by increasing ageing population, high disposable income and rapid technological innovation.Market for arthroscopy devices was valued at $ 3.1 billion in 2014 and it is forecasted to increase by $ 4.3 billion by 2020.According to a health survey more than six and a half million people visit orthopaedic surgeons each year and approximately $2. 9 million arthroscopic knee surgeries are performed each year in the U.S. The number is expected to increase as baby boomers get older.Targeted BuyersThe company will sell its products mainly to the final users of the product. The targeted buyers will be hospitals and ambulatory surgery centres. Dealing directly with users of the product will help in clarifying any ambiguities in design of the product. The number of hospitals and surgery centres are expected to experience high growth in the next two years in US which highlights the opportunity of growing market.MarketingThe marketing program centres on offering innovative instruments that meet the needs of the customers. The promotional strategy involves advertising by placing the product in American journal of Medicine. The company also plans to do networking in the annual conferences by sponsoring information booth.CompetitorsThe company competes against a number of large and smaller companies throughout the United and the world. There are a number of companies operating in US; other companies export their products to US. Major players in the market with highest market share are Smith and Nephew with a market share of about 18%, DePuy Syntheses with a market share of 12 % and Stryker with a market share of 8 %.Smith and NephewSmith and Nephew is a British based company founded in 1856.The company has a global presence and its products are sold in more than 90 countries. It is an advanced medical device company that is known for being the manufacturer of a wide variety of innovative and technologically advanced products.DePuy SynthesesDePuy Orthopaedics designs, manufactures, markets and distributes products forjoints. The company is operating from a number of countries including Australia, Germany, France, UK and Japan. The company was formed in 1895 Warsaw, Indiana and in 1998 it was acquired by Johnson and Johnson. The company is a tough competitor in the US market with one of the highest market share.StrykerStryker manufacturer is based in Kalamazoo,Michigan. Its products include implants that are used in joint replacement, surgical equipment and surgical navigation system, neurosurgical equipment. In the United States most of the products are marketed towards doctors and hospitals. Its products are sold in more than 50 countries through company owned branches as well as third party dealers.Sales and Revenue Forecast (Product Drill Saw)YearsUnits and pricesExpected Revenue

2016300 units@350$105,000

2017350 units @350$122,500

2018400 units @350$140,000

2019450 units@350$157,500

*Price adjustments not taken into accountBone cutting forcepsYearsUnits and pricesExpected Revenue

2016550 units@100$55,000

2017600 units@100$60,000

2018650units@100$650,000

2019700 units@100$700,000

ExpensesManufacturing$40,000

Staffing (new hires)$12,000

Marketing and promotion$ 25,000

Machinery $35,000

Companys operating performance

YearTotal revenue( two products)Total CostProfit/loss

2016$160,000$112,000$48,000

In 2016 the company is expected to earn revenues of $ 160,000 whereas the total cost estimated for the two products came out to be $ 112,000.Therefore the company is likely to earn profit of $ 48,000 in the year 2016.Conclusion and RecommendationsDr surgical has the potential to grow and enter into new markets. Even the company is not focusing much on growth and exploiting the new markets but the ultimate aim of every business should be growth and expansion. Due to intense competition there is not much potential in the existing markets and the company needs to exploit other markets. Good financial position, knowledge skills and experience of the management can help to expand and grow the business. The company does not have very strong distribution system as compare to competitors and mostly the company is involved in B2B selling. The proposed strategy suggested that the company should take initiative in entering US market which is a large market and has lot of potential. It is suggested that the company makes joint venture with a company operating in US. Production and manufacturing activities will be done in Sialkot whereas the US company will have more know how in marketing activities. The idea will be to send directly to the users of the product. The company already focuses on maintain high quality but it will have to make sure that the quality standards are compliant with the rules and regulations of US health authority. As the company will be changing its approach from B2B to selling products directly to the users, it will have to work closely with them in order to comply with all the specifications. Once the company has successfully entered the market it can expand its operations in US as the market is full of opportunities.

BibliographyAli, M. M., Mehmood, A., & Hussain, M. (n.d.). Fred R Daivd's Strategy Formulating Framework, Dr Frigz International. Sialkot.Lundin, M., Sandberg, S., & Nasstrom, M. (2010, January). Knowledge retention and reuse: using CAD models as carriers of knowledge in product development. InASME 2010 International Design Engineering Technical Conferences and Computers and Information in Engineering Conference(pp. 1173-1182). American Society of Mechanical Engineers. Spievack, A. R., & De Toledo, F. A. (1997).U.S. Patent No. 5,591,170. Washington, DC: U.S. Patent and Trademark Office.Johnson, W. (1988).U.S. Patent No. 4,718,413. Washington, DC: U.S. Patent and Trademark Office.

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