Exporting Strategies of Cochlear Limited: A Case Study Analysis

This report examines the exporting strategies employed by Cochlear Limited, an Australian company specializing in hearing implants. The analysis covers the company's expansion into the American, Japanese, and Chinese markets, highlighting key strategies such as extensive research and development to create high-quality, market-specific devices, establishing subsidiaries for market support, and ensuring product affordability through collaborations with government health programs. The report identifies factors contributing to Cochlear's success, including a lack of direct competition, significant barriers to market entry for competitors, and the affordability of their devices. The company's approach to market entry, including the use of US connections to penetrate Asian markets and the importance of patience in navigating regulatory processes, is also discussed. The report utilizes academic references to support its analysis of Cochlear's strategic decisions and their impact on the company's global expansion and market share. The case study offers valuable insights into international business and market penetration strategies within the biotechnology sector.

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Exporting strategy
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Cochlear limited company is in the business of producing devices that help people with hearing
impairments to have a quality life. The company is situated in Australia but it has managed to
expand operations into American markets and the unchartered markets of japan and china. The
business world is quite dynamic and without proper strategies for navigating the available
obstacles, remaining operational will be difficult to leave alone to export products. Cochlear
limited ventured into export business by adopting various strategies which are not limited to;
Research and development
The cochlear company has invested a lot in research and development to ensure that they
produce devices that really suit the target market and also to ensure that they understand all the
factors which influence the export business. The research has resulted in quality devices that
attract attention on their own because they produce magical results when implanted into patients.
This is the most effective way of marketing products as quality products attract the market
(Albornoz, et al.2012, pp.26). The company also researched a lot about its foreign target markets
like America. The company realized that to succeed in America, time is needed as approval by us
food and drug administration takes time and thus patience is key to survive in the American
export market. The company also knew that it needed export experience before venturing into
Asian markets and chose to export to America to gain the needed experience.
Establishing a relationship with experts
The company ensured that it had subsidiaries in the export target market. The main purpose of
the subsidiaries was to ensure that the importing country had good standing with the cochlear
company to penetrate the market easily. The subsidiaries acted as support bases for the company
to ensure there is limited product resistance (Gaur, et al.2014, pp.16). The company used US
connections to penetrate the Japanese and Chinese markets and this worked well for them like in
the case of Japan where America had talks with japan so that American companies can have
more market access in Japan and this helped cochlear exports to japan.
Affordability of the products
Cochlear used the strategy of ensuring that the exported products are affordable to the target
market so that many people can benefit from the products. The company in japan collaborated

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with the government through the ministry of health to ensure that there is reimbursement through
the national health insurance scheme. The affordability of the devices helped the company to
penetrate the market and due to product affordability, more people accessed the devices leading
to an increase in revenues (Love, and Roper, 2015, pp.39). The price aspect is very critical in
marketing as it can lead to an increase in market share.
The major factors which contributed to cochlear limited success in the export market include;
Lack of direct competition
The company enjoyed some form of monopoly as few companies in the host markets had the
needed in biotechnology as the competitors were in infancy stages (Bas, and Strauss-Kahn, 2015,
pp.257). This means that the rival companies offered minimum competition and this allowed
cochlear to thrive. This enabled the company to control the majority of the market share.
Barriers to market entry
The biotechnology market has a lot of barriers to the market which are not limited to license
acquisitions and government approval processes (Karakaya, and Yannopoulos, 2012, pp.11). The
lengthy processes discouraged many companies to venture in the market and this enabled
cochlear to grow in all aspects. The barrier to entry eliminates competition, giving cochlear more
market for its products.
Affordable devices
The devices produced by cochlear are very expensive due to the involved research and approval
processes. This means that cochlear needed to establish connections with the relevant authorities
to ensure they receive reimbursement like in japan, hence increasing its revenues. The revenues
are needed by the company for meeting the cost of productions, research and training programs
(Johnson, 2012, pp.48). Quality affordable products are known to attract large market share and
this was the case for cochlear. The company even had bank collaborations so that customers can
get loans to afford the products.

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References
Albornoz, F., Pardo, H.F.C., Corcos, G. and Ornelas, E., 2012. Sequential exporting. Journal of
International Economics, 88(1), pp.17-31.
Bas, M. and Strauss-Kahn, V., 2015. Input-trade liberalization, export prices and quality
upgrading. Journal of International Economics, 95(2), pp.250-262.
Gaur, A.S., Kumar, V. and Singh, D., 2014. Institutions, resources, and internationalization of
emerging economy firms. Journal of World Business, 49(1), pp.12-20.
Johnson, R.C., 2012. Trade and prices with heterogeneous firms. Journal of International
Economics, 86(1), pp.43-56.
Karakaya, F. and Yannopoulos, P., 2012. Relationship between Export Support, Export Barriers,
and. Journal of Euromarketing, 21, pp.4-24.
Love, J.H. and Roper, S., 2015. SME innovation, exporting and growth: A review of existing
evidence. International small business journal, 33(1), pp.28-48.