Barcelcom

: internationalizing a highly innovative portuguese SME

Abstract

The medical devices industry, worth 260 billion euros, is observing a high rate of technological change, marked by disruptive small innovative companies. Barcelcom, has been part of this phenomenon, by introducing unique, innovative, high revenue potential, patented products, notably, the award winning flagship product, BB-VEIN. Despite possessing additional successful, although not patented, products, the company, overall is struggling financially, with very low yearly profits. It severely lacks complementary assets, whose importance can’t be understated, given the company’s current strategy of trying to capture value on all/most parts of the value chain. Taking into consideration its characteristics, product features and global market conditions, an integrated internationalization strategy was proposed. High revenue potential, patented products should be licensed to companies on the healthcare and sports industries, since they are constrained by the company’s very limited reach and resources. Innovative, but unpatented differentiated products should be sold, in a private-label regimen, to large international retailers, maximizing, therefore, value, through volume instead of margins. Finally, products in which Barcelcom has no competitive advantages, such as traditional socks, should simply be discontinued/fully subcontracted, depending on the coordination costs involved. Essentially, this strategy proposes that the company should focus on its core competency, its know-how, by creating and commercializing high added value products, since it can’t compete on the lower cost segment, dominated by large manufacturers, which exploit conditions such as scale economies and cheap labor.

Date of Award	17 Jul 2014
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Nuno Cardeal (Supervisor)