Selling Medical Supplies in Mozambique

Mozambique faces the significant problem of a major HIV epidemic due to its high prevalence level coupled with other structural factors or causes like high poverty, gender inequality which greatly affects women, cultural elements and enhanced patterns of labor mobility. Mozambique is plagued by acute incidence of AIDS with about 1.3 million affected by the HIV virus, with women being the most affected. Already there has been 1, 10,000 deaths leaving 4,70,000 AIDS orphans. The business plan for the medical supplies in Mozambique can tackle this dreaded disease by means of anti-retroviral therapy. We need to have an understanding of the market environment in Mozambique before engulfing in such a task. Because of the state of health and immunization position of Mozambique, location and the local disease situation, bubonic plague, cholera, dengue fever, hepatitis A, malaria, meningitis, schistosomiasis, and typhoid fever can happen in Mozambique and increased opportunities for selling the medical supplies. While entering Africa's Mozambique, the company has to consider its competitors and find better ways to reach customers. The Internet would be instrumental in creating the market prospects for the new company. Currently more than 343 million health seekers can be reached online. The immense market potential for anti-retrovirals will signify a huge bonus for the new company and also its shareholders.

Selling Medical Supplies in Mozambique


Mozambique lies in the southeastern part of the African continent having 3 main cities viz. Maputo, Beira and Nampula where the affluent live in luxury houses, travel in Mercedes and dine out in restaurants. But, the major part of the population sustain on an agrarian economy with every four out of five residents depending on land for eking out a living. The rural society involves hard work with the women performing the most part of it. The womenfolk constitute most of the farming community and they plant, nurture, harvest the crop and even process the food. The main diet consists of doses of maize porridge which is cooked over fire and consumed with a vegetable or meat stew. (Mozambique- people and society) The population of Mozambique is 18,811,731 with its capital located at Maputo. The average life expectancy in the country among the males is 37.83 years and the corresponding figures for females are 36.34 years as per 2004 estimate. The doctor: patient ratio is 2 doctors per 100000 people. About 57% of the total population has access to safe drinking water. (Mozambique: factfile)

SWOT Analysis of Mozambique:

Strengths (i) Competitive wage structure (ii) Provision of electricity and water supply (iii) Has port access to major markets of Durban and Johannesburg (iv) Free zone legislation (v) Tax rebates and a flexible investment incentive system (vi) Possess capability to build cotton chain. (Strengths, Weaknesses, Opportunities and Threats -- SWOT Analysis)

Weaknesses (i) Has poor levels of investment, labor and business environment laws (ii) Takes much time for establishing a formal business (iii) Investment climate uncertain (iv) Substandard infrastructure at the local level. (v) Existence of a small local market, with the majority of the consumer below the poverty line. (vi) Absence of any formal organization for promotion of industry and foreign investment i.e. development corporation (vii) Substandard development of centralized free trade zones (viii) Low productivity due to incidence of malaria and AIDS; poor infrastructure in terms of sewage, hygiene, nutrition; absence of training besides dearth of amenities like lighting, local financing and local materials for export quality products; greater gestation for inputs and delivery, and transportation to major developed markets takes a lot of time. (Strengths, Weaknesses, Opportunities and Threats -- SWOT Analysis)

Opportunities: (i) Existence of tariff-tree access to American markets for qualified clothing under the African Growth and Opportunity Act -- AGOGA. (ii) Capability to use garments from any nation to eligible for tariff-free treatment under the AGOA third-nation fabric provision till September 2007. (iii) Tariff-free access for eligible apparel and cloth which falls under the EU Everything but Arms Agreement -- EBA and Cotonou Agreement. (iv) Provision of tariff-free access to Africa's wealthiest markets, South Africa for eligible apparel under the Southern Africa Development Community -- SADC. (v) Rising demand for raw cotton and yarn and increasing prices in important markets imminent with the elimination of MFA quotas on January 1, 2005 and the proposed exclusion of U.S. Cotton subsidies in the WOTO Doha round.

Threats (i) Removal of MFA quotas and concentration of yield among the biggest and most efficient international suppliers (ii) South African customs of 90 day holding back of tariff pending documentation of onward forwarding of freight transported across the border. (iii) Recognizing of Mozambique declarations of origin. (Strengths, Weaknesses, Opportunities and Threats -- SWOT Analysis)

Potential markets for Medicines:-

Mozambique is plagued by acute incidence of AIDS with about 1.3 million affected by the HIV virus. Already there has been 1, 10,000 deaths leaving 4, 70,000 AIDS orphans. The country is faced with a severe, generalized AIDS epidemic however its effects are not evenly distributed. Poverty coupled with meager health infrastructure and pockets of population concentration are the main determinants of high HIV incident rates. The country was affected due to civil war both inside and outside the nation until 1992; however economic activity from that period has speedily driven HIV prevalence rates almost as high as those in the adjacent nations. The occurrence of HIV infection is anticipated to be 15% in 2005 having more than 500 fresh infections daily. Incidence of Tuberculosis -- TB and Malaria as also epidemics of cholera also aggravate the impact of HIV / AIDS. (HIV / AIDS Situation in Mozambique)

Absolute and Comparative Advantages:

With the country up-scaling the HIV / AIDS programs and large number of people are reached with prevention, care, and treatment services, it is crucial to reinforce the potential of Mozambican people to manage and deliver these services. In the country there are roughly 650 doctors, 270 of them in the capital city. Under this situation, there are some districts of the nation which has just a doctor who serves 70,000 people, abruptly restricting the rapidity of service expansion. Deficiency of other health providers like nurses, pharmacists, lab technicians are comparable. (The Emergency Plan in Mozambique)

External to the health system in which the multi-sectoral HIV responses are dependent on the community based initiatives and volunteers; Mozambique suffers from severe drawbacks having an adult literacy rate of 40% and 23% of literacy among women. Against these challenges USG funded HIV programs functioning in the country include strong training and support elements which are planned to enhance the productivity of the present service providers and also their numbers, and assist partner organizations, particularly Mozambican partners, to be increasingly more efficient while extending quality services. (The Emergency Plan in Mozambique)

Business Opportunity Analysis

The new medicines are often the result of the process of research and development and they were introduced in the market by means of research-based pharmaceutical companies. These companies are responsible for a big chunk of the international trade in the field of medicine. These companies are also known as Research & Development companies. There is a problem that the TRIPS agreement might increase the levels of prices further, as it might make the manufacturing or producing of copy drugs more difficult, especially if the TRIPS security is not being incorporated in the laws of the developing nations. Besides, it should also be noted that when the drugs go off the patient list, the production of generic drugs could be slow to start. A lot of processes exist wherein the poor patients are able to get the medicines from a private pharmacy. In these two cases, one can witness that the prices vary considerably from one nation to another. In some cases, the total cost of the medicines is being borne by the patients and in the case of others; the medicines are also available on heavy subsidies. It has also been estimated by the WHO that 75% of the drug consumption in the case of the developing African and Asian nations is being done by the private sector. (Drug deals: Medicines, Development and HIV / AIDS)

Potential Competitors, Competitive Advantages and International Strategies:

While entering Africa's anti-AIDS drug market the company has to be considered as the top performer in the Black Economic Empowerment -- BEEE in South Africa and its expansion into the remaining region of Africa is backed by the SA Health Minister Manto Tshabalala Msimang. The new sector of trade and investment into Africa will render a crucial boost to the SA Black business that believes it has a hard task breaking into the white business world. The health minister stated that the local production of the anti-retroviral HIV treatment drugs which is being backed by the World Health Program must be seen in the context of the "regional" meaning of the African continent. It has also been stated that the production of medicines must be strategically located within the region. The strategy thinks of a market size which would guarantee sustainability as also technical…