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mpete on better terms in global value chains. The strategy should not be to impr
ove the number of schools or hospitals or roads
the strategy should be to have b
etter governance systems so that service delivery is efficient and the quality i
s regulated and strictly monitored.
The demand in the export markets over the recent years have shifted from basic t
o more sophisticated products, this has provided an easier market for the basic
instruments made in Pakistan as there are no competitors internationally. Accord
ing to general competitiveness framework the sophistication of local customers i
s an integral reason why companies are forced to innovate and then succeed abroa
d. In this aspect the surgical instrument industry is 100% export focused and he
nce it fails to benefit from the demand of the local customer.
The structure of the industry is intensely competitive. There is strong rivalry
among firms of varying sizes which has had a negative impact on the performance
of the industry. Price war behavior is a common practice. This intense competiti
on has kept export margins low and has resulted in low levels of investment. The
re is no foreign ownership in the industry. The top 5-6 companies have captured
around 25% of the export market. These are the firms that have made more investm
ents and have better access to modern technologies and better productivity level
s.
barriors
For small company, it is very difficult to start supplying local hospitals becau
se of very tough
criteria and corruption mafia. The bidder officer
s are bribed by the large companies and it
become difficult for small company to penetrate.
Also the payment system is also very long of
government institutions, normally it take 3 to 4 months to get the whole amount
from the
hospitals. It is also very dif
ficult to find trustworthy customer in the domestic market
Finding trustworthy and long
term buyer in international market is the main difficulty which we
can foresee.