Internal Expansion Proposal

International Expansion Proposal

ECO/HC 561

October 18, 2010

International Expansion Proposal

BloodMobile Inc (BMI) is a blood collection and storage company that operates a network of mobile blood collection and storage units in the United States. BMI’s advanced blood storage capability has made it one of the first for-profit organizations to establish blood supply relationships with major metropolitan hospitals in every state in the country during the past five years. In order to expand its successful U.S. operations globally, BMI has decided to first invest in implementing its business plan in India. BMI’s mobile unit-based strategy allows better access to India’s population which may lack resources or the time to travel to blood donation centers situated in centralized locations. This proposal explains and compares the price charged in the Indian versus the U.S. market, provides rationale for hiring practices regarding foreign or U.S. health care professionals, discusses limits of supply and barriers to entry into the Indian market, consumer responses to services and disbursement/receipt of payment for imports and exports.

Blood Product Pricing

The blood services industry depends on voluntary donation of altruistic individuals for the supply of their commodity of interest – human blood. However, the donated blood is not offered free of charge to hospitals or consumers, due to the costs associated with collection, processing, storage/preservation, and infrastructure (Choudhury, 2008). As such, if the blood is not appropriately priced, or the cost of blood services isn’t subsidized by health insurance or government payments, the viability of the industry may be endangered.Currently, BMI charges US$130 for a unit of blood in the United States. In comparison, the National Blood Transfusion Council (NBTC) of India recommendations for blood pricing in Indian Rupees (INR) (US$1 = 44 INR) are as follows: 850 INR for whole blood and red...