...Caso Eli Lilly and Company: Estrategia tecnológica del proceso de manufactura (1991) Problema: Las grandes compañías farmacéuticas hacen inversiones enormes en Investigación. Aunque sólo 1 entre 5.000 ó 10.000 compuestos nuevos tienen proyección comercial, las leyes de patentes permiten explotar los productos en forma exclusiva por un promedio de 9 años. Para ellas es fundamental ser los primeros en salir al mercado con productos para públicos específicos, los cuales son tan rentables que permiten recuperar la inversión siempre que se logre conquistar el mercado rápidamente. Sin embargo, el sector está bajo un estricto control de los gobiernos, cuyas regulaciones pueden retrasar el lanzamiento de nuevos y reducen el tiempo en el que se pueden aprovechar las ventajas de las patentes. La mejor forma de contrarestar el efecto de estas demoras es crear eficiencia en las operaciones por medio de una transición fluida entre las etapas investigación, desarrollo y producción. Eli Lilly & Co. (Lilly) fue fundada en 1876. En los años 80, estaba orientada a la investigación para el desarrollo de nuevos productos en áreas específicas y logró el éxito con derivados de insulina, antibióticos y antidepresivos. Bajo una gerencia cuidadosa, Lilly promovía vínculos fuertes con universidades y centros de investigación. Sus esfuerzos de mercadeo dirigidos a los médicos le dieron una posición de liderazgo en el mercado. Lilly combinaba efectivamente dos de los elementos que forman parte de...
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...The Problem Joint Ventures do not always work and when they do they don’t work indefinitely. What Eli Lilly and Ranbaxy are facing now is the dilemma of rather to continue with their JV, Eli Lilly Ranbaxy, or should they separate and continue each one by its own means. The situation represents both a problem and an opportunity to both companies, as there are important trade-offs to be considered before any decision is taken. The Environment In the last decade the environment for the pharmaceutical industry changed radically in India. Before the 1990’s there were no regulations for patent recognition and the government had an active role in establishing drug prices through the DPCO, which were situated amongst the lowest in the world. Profit margins were also regulated at around 6% of sales. As a result many of the multinationals started exiting the Indian market. As India enter the GATT and the WTO in 1994 patent protection would become active in India from 2004-2005. In the international arena, patent regulation was also little by little becoming stronger and many of the big players were going through M&A processes that further increased the sales concentration in few companies. These companies had a hard time competing with local laboratories that produced generic drugs with no R&D expenses and at a fraction of the price. Eli Lilly Ranbaxy portraits the example of the traditional JV in which Ranbaxy, a company from less-industrialized country, offered the knowledge and...
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...ASSIGNMENT MARKETING MANAGEMENT |CASE |INDIVIDUAL ASSIGNMENT |GROUP ASSIGNMENT | | |(Please select 1 question for your individual |(Please select 2 questions for your group assignment | | |assignment regardless how many questions are given in |regardless how many questions are given in each case) | | |each case) | | | |Submission deadline: JANUARY 4TH, 2014 | | |Submission to: ANHDANGLUCKY@GMAIL.COM | |ZENITH |What would you do to improve the reliability of the |What managerial and research problems that face Zenith?| | |market research, if you were the top management of the | | | |company? |Where could Zenith get the relevant information? | | |What would the best way be to discover the market |What would you do if you were Pearlman? | | |demand of the new product of Zenith? | ...
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...Parinaz Kokabi OP 300 “Elli Lilly and the Company: The Flexible Facility Decision” case analysis Due to the fierce competition in pharmaceutical industry, Elli Lily has to change its product development process to retain its situation in the market. Steve Mueller, manager of strategic facilities planning, must suggest the company what type of manufacturing facilities to construct. These new facilities were needed for three new products (Alfatine, Betazin, and Clorazin), which the company expected to launch in 1996. His decision will be based on decreasing the lead-time by 50% and reducing the costs by 25%. According to the case, Mueller suggest three options: one option is to build one specialized facility; the second option is to build one flexible facility, and the third options which is stated under the second option is a combination of specialized and flexible facility. The first choice, building a specialized facility, will not reduce the production lead-time. In addition, since the facility is built only for one type of product, if that product cannot be launched to the market the part of the facility might have to be retrofitted to produce another product. Further, it can cause delays in production, which can cost the company millions of dollars in loss. However, this option is very productive (almost 16,000 kilograms of output per rig at 80% of utilization) because the plant is dedicated to a set of special products and there is no changeover. Moreover...
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...Eli Lilly case questions 1) Did Eli Lilly pursue the right strategy to enter the Indian market? It was a right strategy for Eli Lilly that started a joint venture with Ranbaxy to enter the Indian market. First of all, Ranbaxy was the second largest pharmaceutical company that manufactures bulk drugs and generic drugs in India, with a domestic market share of 15 per cent. It had established broad distribution network, and it was the second largest exporter of all products in India. Ranbaxy’s capital costs were 50 per cent to 75 per cent lower than those of comparable U.S. plants. Second, the timing was perfect for Eli Lilly to enter the Indian market. During 1970s, the Patents Act 1970 and the Drug Price Control Order (DPCO) was issued. And India was opening its drug market. Third, there was possibility to conduct cheap clinical trials in India. 2) Considering the evolution of the JV, evaluate the challenges that JV leaders faced in each phase. Andrew Mascarenhas was the first managing director of the joint venture. He created the JV’s team, positioned the JV in the market, set its operations developing the marketing strategy. Challenges he faced were hiring sales force and recruiting doctors and financial staff. He trained them on the company's value, philosophy and code ethical conduct. The JV reached break-even and was becoming profitable at the end of his managing time. Chris Shaw built systems and processes to bring stability to the fast growing organization...
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...Eli Lilly in India : Rethinking the Joint Venture Strategy Pharmaceutical companies spend more than 20% of their sales on research and development (R &D). Patents for product ( for 20 years) and process were essential means by which a firm protected its proprietary knowledge and they could command higher prices for their products. Many multinational pharmaceutical firm subsidiaries in India imported drugs from their country of origin and made a huge profit. However in 1970¶s, the patents for all pharmaceutical and agricultural products were abolished and process patents permitted for 5 to 7 years. The Drug Price Control Order (DPCO) instituted price controls by government, multinationals market share dropped from 80% in 1970 to 35% in mid 1990s so they were forced to exit from India due to lack of patent protection in India. In November 1984 Dr. Manmohan Singh , the finance minister encouraged foreign direct investment and increased the maximum limit of foreign ownership from 40% to 51%. Colonel Eli Lilly founded Eli Lilly and Company in 1876. It was a world leader in injectable antibiotics and in supplying insulin. Ranbaxy in early 1990¶s was India¶s largest manufacturer of bulk drugs and generic drugs. Ranbaxy approached Lilly to supply certain active ingredients or sourcing of intermediate products to Lilly in order to provide low cost sources of intermediate pharmaceutical ingredients. Success of Joint Venture i) Lilly used Ranbaxy¶s help for getting government approvals...
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...Cymbalta Case Study Analysis Executive Summary Introduction: The Problem It’s April 2000 at Eli Lilly and Company where their flagship product Prozac is the leading brand of anti-depression medication and is set to expire in December 2003. Even though that is the official patent expiration date, no one within the company could be sure exactly how much time Prozac had left (Okef & Laufner, p.1). Patent expiration would mean that generic versions of the drug would flood the market and Prozac’s current $2 billion in annual sales would create a huge revenue gap (Okef & Laufner, p.1). John Kaiser, Marketing Director at Lilly is asked to give a presentation on a topic developing a successor to the now legendary anti depressant Prozac, which later on Kaiser titled “No Pain, No Gain.” He presented an overview of what depression is exactly and analyzed the effectiveness of Cymbalta comparing it to Prozac. After a four-and-a-half long marathon, some challenges and concerns were raised by some of the senior leaders of Lilly about their doubts that Cymbalta could in fact replace the leading brand. Strategic Planning In 1998, the New Antidepressant Team (NAT) was formed by two colleagues at Lilly: Mark Demitrack and Brett Schmidli, and later asked two other members Jim Lancaster and John Kaiser to join them based on their professional experience. The mission of the team was to find and develop a drug that would later replace Prozac. They quickly and efficiently narrowed...
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...Executive summary: With the fast approaching expiration of its Prozac patent, Eli Lilly has to decide regarding the future course of action of its next generation anti-depressant drug. In this case analysis, the company faces three critical decisions before NDA submission: 1) establish Cymbalta as efficacious for treating major depressive disorders (MDD) using once-a-day (QD) dosing, 2) pursue a separate pain indication in addition to submitting for an MDD using twice-daily (BID) dosing, and 3) delay submission until both issues were established. All of these options are complex and not without difficult trade-offs but based on market research of its customer segments and market potential, the best strategic option is to prove efficacy for treating MDD using QD and only after launch get FDA approval for treating pain. 1. FDA approval for once-a-day dosing for Cymbalta is more important to have at launch. First, Cymbalta is the successor to Prozac and with it carries the brand that creates this resonance in the mind of consumers (patients/physicians). This is a successful brand that patients trust, value and can identify with. With this brand, Lilly has established a perceptual positioning and differentiation from its competitors, and so as to introduce this next generation product for the first time for a different indication, Lilly could run the risk of losing their large customer base. Second, establishing efficacy for treating MDD using QD dosing is more promising than pursuing...
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...The most relevant dimensions to use in order to create useful segments for Cialis are: 1. Age 2. Demographic Demographic Marital Status 3. Income 4. Education 5. Psychographic Psychographic Life Stage/Occupation (Student, Employed or Retired) 6. Values 7. Usage Patterns Firstly, age is a valuable dimension due to the strong positive correlation to erectile dysfunction (ED) incidence. Secondly, as shown in the demographic data presented by Lilly ICOS, most men who suffer from ED are either married or living together with their partner. Being the influence of the spouse one of the strongest factors in seeking solutions for ED, this reveals as an essential dimension to include in our study. Thirdly, taking into account income and education allows us to explore different purchasing powers and also how different people perceive and sense the product. Concerning the usage patterns, I believe the best way to ungroup potential customers is to consider the 3 groups suggested by Lilly ICOS’ study: Viagra current users; Viagra dropouts; never used Viagra. By considering this, helpful advices may be provided about the best, most effective way to approach different types of customers. Thereby, there could emerge a lot of different segments, but only a few of them would be relevant to Cialis. This way, restraining our analysis to the male population with Erectile Dysfunction, due to the nature of the product, we can find 3 important segments: A. Young...
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...ADMN417 Assignment 2: Eli Lilly in India: Rethinking the Joint Venture Strategy Executive summary: Eli Lilly entered into a joint venture with Ranbaxy in India in 1992. A decade later both must decide whether this relationship remains mutual beneficial. Both companies have enjoyed a strong working relationship with identical value system as well as strong growth. Ranbaxy has become international and thus needs to concentrate more on generics and growth in US and UK; the joint venture with Eli Lilly no longer seems to be central to Ranbaxy’s current goals. With major changes in India’s regulation and patent protection, Eli Lilly can now enter the Indian market independently and soon would enjoy product patent protection. Dr. Lorenzo Tallarigo, president of Intercontinental Operations at Eli Lilly should end the joint venture with Ranbaxy in India. Eli Lilly will purchase all outstanding shares held by Ranbaxy at a fair market value, rebrand its name in India to simply Eli Lilly, and maintain current staff from the joint venture. The current operation from the previous joint venture should be maintained without any additional major changes since profits are already assured beyond 2005. Ranbaxy will be able to focus on the international markets with additional capital and Eli Lilly to continue growth in India. Problem statement: A decade after the formation of the joint venture, several changes have occurred in both the external environment as well as the expectation of...
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...of the Pharmaceutical industry in the US and the current decline of the blockbuster products of Eli Lilly which were coming to an end of their life cycle, the company is in the process of developing three new products that plan to launch in 1996. A great number of factors such as decrease of the industry growth rate, steady decline of innovation, increasing competition from competitors, generic drug substitutes, government regulations and an ever increasing cost in manufacturing, R&D and quality protocols and processes have made the decision to launch new products into the market place a necessity and created a topic of debate within the management and leadership of the company. In response to these conditions, the management has established a company-wide initiative and goals to accomplish in the launching of their three new upcoming products. These goals were set up keeping in mind that the company wanted to bring new innovative products to their customers faster, cheaper and serving the needs of their customers. 1. Reduce manufacturing costs by 25%. 2. Reduce product development lead time by 50% as compared to the current lead time of 8 to 12 years. 3. Never Stock out – meet projected manufacturing demands. The dilemma facing this company and the upcoming challenge has given rise to a difficult decision by Steve Muller, Manager of Strategic Facilities and Planning at Eli Lily and Company. The decision was to decide on the type of manufacturing facility that will be...
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...1. Did Eli Lilly pursue the right strategy (i.e., should it have used a joint venture) to enter the Indian market? Why or why not? You should refer to Chapter 6 of the notes for guidance. With the upward trend of globalization, cross-border commercialization has become inherent in business strategies pursuing not only improved competitiveness but to avoid market share erosion. Expanding to new markets, reducing friction with socio-cultural and legal barriers, reduce capital costs, securing raw materials and implementing economies of scale are just a few motivations which to look abroad for and consider the intricacies of operating in another country. Changes in India’s economic policies from an import substitution to an export-driven one, was the legal foundation that allowed Eli Lilly to pursue its interest to market its drugs in India, where it already had relationships with local manufacturers to produce human or animal insulin for the Soviet Union market, but did not for the Indian market (Bartlett & Beamish, 2014, p. 524) The opportunity presented by Ranbaxy, the second largest pharmaceutical company in India, to supply certain active ingredients or intermediate products to formulate and complete Lilly’s, and for the Joint Venture (JV) to sell and distribute those products, was the perfect opportunity to enter a “new” market while sharing the costs and risks with a well-known and respected partner. With the then existing market conditions (Sales turnover caps, mandatory...
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...Introduction In 2002, product leaders from the Biotech start-up ICOS, and Eli Lilly prepared to take a new erectile dysfunction medication to the market. Cialis would be positioned in a market which was currently dominated by Viagra, an erectile dysfunction medication that had been introduced by Pfizer in 1998. In the following case analysis, I will examine the process used by Lilly ICOS, LLC to bring Cialis to market. Utilizing the Harvard Business School Case “Product Team Cialis: Getting Ready to Market” I will point out certain facts surrounding the case, and highlight key issues. Alternative courses of action around bringing the product to market will be identified and evaluated. Finally, a recommended course of action for the company will be discussed. Facts Surrounding the Case At the time that Cialis was developed as an erectile dysfunction (ED) treatment, that landscape was being dominated by a single player. Viagra, developed by Pfizer, was released four years prior and enjoyed great success over the previous three years. Viagra, whose main ingredient is Sildenafil, was generating over $1 billion in sales for Pfizer year over year for the previous three years (Ofek, 2010). While Viagra was successful in its initial years in the initial market, it was not without its problems. Patient satisfaction with Viagra was below 50% in all markets with the exception of Germany and Italy. Viagra was only effective for hours post dosage, and was affected by the consumption...
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...* Situation Analysis * Lilly ICOS LLC * Lilly’s innovative strategy on producing “life-qualitiy drugs” and meeting economic target of $500 million in annual sales, ICOS aim of recognition in pharmaceutical industry and their new drug advantages over competitors constituted the starting point of this marketing plan. * Viagra and Levitra * Cialis’ main competitor, Viagra, presents lower benefits and effectiveness in medical terms. However, Viagra possess a powerful characteristic, first-mover advantage. Their huge and increasing investment on R&D resources along with their accurate marketing efforts as well as their focus on sales force constitute their success ($1.5 Billion on annual sales), specifically in the U.S. market. * On the other hand, Levitra, the second competitor, showed good performance on diabetics ED patients. In contrast to their poor presence in US market and small sales force world-wide (1200 sales representative). * ED Market * The demographic data yielded that ED treatment market prevails among males suffering dysfunction in their pre and maturity age (40 to 65 years or over), married or living together (73-80%), presenting a sexual partner (85-92%), and with lower yearly income (<25K) (except for USA). * During seek of treatment process two main barriers were found: embarrassment, commonly among youngest respondents and optimistic reaction about future of their condition. Also partners hugely influence ED patients to...
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...http://books.google.com/books?id=3JnBAgAAQBAJ&pg=PA195&lpg=PA195&dq=eli+lilly+overshot+the+insulin+market&source=bl&ots=G2D27Vgs_-&sig=anXMu7VjAyS0IVWOeGePofwnWSY&hl=en&sa=X&ei=KC01U_H9JMfuyQH1yIGwDQ&ved=0CDkQ6AEwAA#v=onepage&q=eli%20lilly%20overshot%20the%20insulin%20market&f=false Eli Lilly made a strategic decision to create Humulin for a number of reasons including problems with animal insulin, increased insulin usage, and decreased red meat consumption. In addition, competition in the insulin market historically was based on 2 factors, purity and "time profile". (Christensen, 2004) They may have overshot the market but I think it was the right decision. Although patients weren't looking for a new pure insulin and it took years for Humulin to gain traction it eventually accounted for 80% of ELC's insulin volume. Considering ELC had 85% of the North American insulin market this is a significant source of revenue for the company. (Christensen, 2004) Had ELC been complacent with animal insulin they would have left the door open for a competitor (Novo) or an upstart to create this new insulin first and eventually take market share from ELC. They may have cannibalized their own market in animal insulin in the process but they continued to maintain market share. Novo- Nordisk eventually introduced its own human insulin and along with Hoeschst they controlled the market. Since the cost of entry is so high due to clinical trials...
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