Global dynamics - see below

timer Asked: Aug 14th, 2014

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Assignment 2.2: Doing Business In Europe


You are an executive employed by a mid-sized U.S. biotechnology firm, located in Boston, MA. Your company is focused on the discovery, development, and commercialization of targeted small molecule drugs to treat specific cancers and inflammatory diseases in the elderly. The firm has 250 employees in the United States, two products approved by the FDA already on the U.S. market, and three others in development.

The company was established in 1998 and was listed on the NASDAQ three years later. Revenue is estimated at 45 million USD. The firm identified significant potential for approving one of its established products in most European countries. In addition, the firm has recognized Europe as one of its potential key markets, due to an aging population.

For these reasons, you are being tasked to envision a small European corporate office that will be dealing with regulatory and legal affairs, as well as with local sales strategies. In the initial stage, the office should include 10–12 people, of which three are to be expatriated from the US and the remainder hired locally.


  1. Prepare a substantive executive report in which you advise the CEO on the future location of the European office, choosing from the following four locations: London, Paris, Munich, or Budapest.
  2. Research the Web for information on the biotechnology industry in each location, operating costs, and language and regulatory hurdles for doing business.
  3. Assume that there is a single European regulatory agency located in Brussels, Belgium.
  4. Consider the following parameters: London is significantly more expensive than Paris, which is in turn more expensive than Munich and Budapest; the London area, however, represents more than 60% of the European biotechnology output and has a well developed infrastructure; Munich is also developing biotech centers, and Budapest is considered the R&D center for Central Europe and Russia.
  5. Also, take into account language and cultural barriers and the quality of life, which is highest in Paris and is closely followed by Munich. Budapest has the weakest infrastructure and lowest quality of life for expatriates. All four cities have enough skilled workers, with London and Paris leading the pack. However, the costs of employing local staff vary.
  6. Finally, consider the proximity of the local culture to that of the East Coast of the US.

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