SIA International

State influence: A huge medicine distributer in the Russian market. SIA International supply pharmacies within whole Russia with products from 875 suppliers (both Russian and foreign)[1]. SIA International is not producer, just distributor of the pharmaceuticals, therefore its business not as strongly regulated as producer’s one. Nevertheless it is not so easy to make smooth export flow, because of the international medical norms. The majority of our medicines do not satisfy international norms.[2] SIA International is privately owned[3]. Also the company takes part into State Program of Additional Medicine Provision for the Subsidized Population[4]. This program is financed by the government[5], therefore state influence can be considered from this point.

Internationalization: All company’s production facilities are located in Russia. Nevertheless SIA International is a part of European Pharmaceutical Association (so its medicines satisfy those standards) it still has no export. So no internalization.

Katren

State influence: Katren is a Russian national pharmaceutical distributor set up in 1993, which is subject to the laws and regulations of the Russian state so the state influence are high here. In fact, new regulations of the Russian Government No. 1081 on “licensing of the pharmaceutical activity” (“Regulation on licensing of the pharmaceutical activity”) entered into force on 7 January 2012. This regulation on licensing of the pharmaceutical activity was adopted as a follow-up to Federal law dated 4 May 2011 No. 99-FZ, thus revoking the previously-effective Regulation of the Russian Government dated No. 416. This regulation on licensing provides for a definite normative list of services for rendering of which it is necessary to obtain a pharmacy license or to change a product. For Katren, as for Protek, it means that intend to obtain a pharmacy license or to change old products should approach authorities (Federal Service on health care and social development supervision or Executive authorities in the constituent parts of Russia). Nevertheless the wholesale part of Protek business is not regulated so strictly, while it is not connected with strictly regulated production process. Therefore for wholesale state influence is moderate.

Internationalization:

Country	Kazakhstan
Year of entry
Industry/ business area	Pharmaceutical
Entry mode	Katren has acquired a 51% stake in Kazakhstan's second-largest distributor Amity International.
Motives	This acquisition is part of Katren's 'going international' project. Indeed, Katren is trying to establish business operations or investment in all former Soviet states. This acquisition gave Karen a strong foothold in a rapidly emerging pharmaceutical market.
Firm specific advantagesused on the foreign market	Amity is the second-largest distributor in Kazakhstan so it should allow for smooth entry into the market.
First mover or follower	First mover
Type of state involvementin the process of internationalization	Collaboration between the Russian and Kazakh governments facilitates this type of transactions between companies in both countries. Indeed, the governments of these two countries established a strategic alliance in order to reap the benefits of this type of operation.
Evaluationof the success of the internationalization	The additional turnover from Kazakhstan would be limited compared with increased market share penetration in Russia. Nonetheless, it gives to Katren the possibility to progressively extend its international position. Moreover, Katren strarted to do some changes about workforce and management structure, a move which should allow for continued development in Kazakhstan.