...RANBAXY LABORATORIES LIMITED Introduction Ranbaxy was founded in Amritsar in 1937 by Ranjit Singh and Dr Gurbax singh, who distributed vitamins and anti-tuberculosis drugs for a Japanese pharmaceutical company. After the Second World War, Ranbaxy continued as a distributor. After some time his cousin brother Mohan Singh bought the company from his cousins Ranjit Singh and Gurbax Singh. Ranbaxy's name is a fusion of Ranjit and Gurbax's names. Ranbaxy Laboratories Limited, headquartered in India, is an integrated, research based, international pharmaceutical company, producing a wide range of quality, affordable generic medicines, trusted by healthcare professionals and patients across geographies. It is ranked amongst the top ten generic companies world wide. The Company serves its customers in over 125 countries and has an expanding international portfolio of affiliates, joint ventures and alliances, ground operations in 49 countries and manufacturing operations in 8 countries. In 2011, Ranbaxy Global Consumer Health Care received the OTC Company of the year award. The Indian government introduced patent legislation in 1970. However this only protected processes. Competitors were free to imitate products as long as they used a different process. This created a disadvantage for MNCs compared to local imitators, and they were further discouraged by the introduction of price controls on drugs and later (in 1973) by restrictions on the amount of equity they could hold in local...
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...Strategic direction for joint venture between Eli Lilly Co and Ranbaxy Laboratories Limited Problem After enjoying a successful JV partnership with Ranbaxy for the last few years, the strategic decision that Lilly now has to make is how to move forward. The Indian pharmaceutical industry has witnessed some significant changes and it seems that the business goals of both companies have diverged as well. Situation Overview Thus far it appears that Eli Lilly’s decision to enter the Indian market has been a wise one. It has enjoyed a successful partnership with Ranbaxy, which has also allowed its brands to gain recognition within the local market. Considering other metrics, including sales growth, access to new distributors and innovative product development, the JV has proven to be successful as well. Both parties agree that the JV has proven mutually beneficial, however circumstances have changed considerably since the venture was first initiated. Ranbaxy has expanded its own operations internationally and expanded its global reach through various acquisitions. In addition, the business strategies of both firms have taken a divergent direction. Lilly would like to continue to focus on the development of its patented global drugs, through innovation and discovery. On the other hand, Ranbaxy believes that its opportunity lies in offering generic drugs to the local market and increasing its presence abroad. Ranbaxy has signaled an intention to sell its stake in the JV if the...
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...Pharmaceuticals in India, as of 2010[update] | Rank | Company | Revenue 2010 (Rs crore) | Revenue 2010 (Rs billion) | 1 | Ranbaxy Laboratories | 4,198.96 | 41.989 | 2 | Dr. Reddy's Laboratories | 4,162.25 | 41.622 | 3 | Cipla | 3,763.72 | 37.637 | 4 | Sun Pharmaceutical | 2,463.59 | 24.635 | 5 | Lupin Ltd | 2,215.52 | 22.155 | 6 | Aurobindo Pharma | 2,081.19 | 20.801 | 7 | GlaxoSmithKline | 1,773.41 | 17.734 | 8 | Cadila Healthcare | 1,613 | 16.13 | 9 | Aventis Pharma | 983.80 | 9.838 | 10 | Ipca Laboratories | 980.44 | 9.8044 | Major players [edit] Ranbaxy Laboratories Ranbaxy is the leader in the Indian pharmaceutical market, taking in $1.174 billion in revenues for a net profit of $160 million in 2004. It was the first Indian pharmaceutical to have a proprietary drug (extended-release ciprofloxacin, marketed by Bayer) approved by the U.S. FDA, and the U.S. market accounts for 36% of its sales. 78% of Ranbaxy’s sales are from overseas markets; its offices in 44 countries manage manufacturing in 7 countries and distribution in over 100. IMS Health estimated that Ranbaxy is among the top 100 pharmaceuticals in the world and that it is the 15th fastest growing company. By 2012, Ranbaxy hopes to be one of the top 5 generics producers in the world, and it consolidated its position with the purchase of French firm RGP Aventis in 2003. Ranbaxy also has higher aspirations, however, “to build a proprietary prescription business in the advanced markets.” To this end...
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...TOPIC : RANBAXY LABORATORIES Submitted to: Prof. Deepak Shyam MBA Dept Submitted by: Nithin Unnikrishnan Nair 1PT12MBA36 CONTENT * INTRODUCTION * VISION AND MISSION * INDUSTRY ANALYSIS(PORTER’s FIVE MODEL) * SWOT ANALYSIS * COMPETITIVE STRATEGY OF RANBAXY * BCG MATRIX * GLOBAL STRATEGY FOR GROWTH * RANBAXY LABORATORIES INTRODUCTION Ranbaxy Laboratories ltd is an Indian multinational pharmaceutical company that was incorporated in India in 1961. The company went public in 1973 and Japanese pharmaceutical company Daiichi Sankyo acquired a controlling share in 2008. Ranbaxy exports its products to 125 countries with ground operations in 43 and manufacturing facilities in eight countries. In 2011, Ranbaxy Global Consumer Health Care received the OTC Company of the year award . Ranbaxy was started by Ranbir Singh and Gurbax Singh in 1937 as a distributor for a Japanese company Shionogi. The name Ranbaxy is a portmanteau of the names of its first owners Ranbir and Gurbax. Bhai Mohan Singh bought the company in 1952 from his cousins Ranbir and Gurbax. After Bhai Mohan Singh's son Parvinder Singh joined the company in 1967, the company saw an increase in scale. In June 2008, Daiichi-Sankyo acquired a 34.8% stake in Ranbaxy, for a value $2.4 billion. In November 2008, Daiichi-Sankyo completed the takeover of the company from the founding...
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...ELI LILLY IN INDIA RETHINKING THE JOINT VENTURE STRATEGY Abhay Kishore – 01 Abhishek Kunal – 05 Anil Kumar Jadli – 11 J.Harish – 25 Khushal Malik – 28 Sharad Singh – 49 PHARMACEUTICAL INDUSTRY – Global Trend • • • • Mainly concentrated in the United States, Europe, and Japan Developing a drug from discovery to launch took 10 to 12 years. Cost of development of drug is between $500-$800 million. Drugs were strictly controlled by government agencies: o o o o Food and Drug Administration (FDA) – USA, CPMP – Europe 12% 8% North America Europe 38% 18% Asia Japan MHW – Japan DPCO & Indian Patent Act - India • • Size of industry : USD 960 billion in 2012. Few Firms control entire market (Oligopoly). 24% ROW • 4 Firms – Control 20% , • 20 Firms – 50-60%, • 50 Firms – 65-75% PHARMACEUTICAL INDUSTRY – Global Trend • Covered the chemical substance itself • Offered typically 20 years of protection • Usually a lag time of 1012 years by the time the patent was obtained and the launch date • Covered the method of processing or manufacturing the product • Very little protection because it was easy to slightly modify the process Global Issues in Pharma Sector • Prices in of the drugs varied in developed countries • US & Canada by factor 1.2 to 2.5. • Europe by factor 1.1 to 2.5. Parallel Trade: an outside company sells a patented product in a market not designated to sell the drug. o • Independent firm exploited parallel trade by using the differentials...
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...Strategy Executive summary Eli Lilly entered the Indian market in a joint venture with Ranbaxy, in order to capitalize on increasingly favourable market conditions, low costs and to gain a foothold for entering other Asian markets. This move succeeded because of a commitment to values for the two partners, cooperation and excellent management. Ranbaxy smoothed the way with existing distribution networks, government contacts and local market knowledge. Lilly provided foreign expertise, competent managers and capital. The venture earned both firms significant advances in market share and earnings, and the relationship remained positive throughout. As the Indian economy has become increasingly liberalized and open to foreign investment, there is great potential in the market. Other foreign firms are entering the market, and as a well-established powerful player in the market Lilly no longer needs to use Ranbaxy as an intermediate. Lilly seeks continued, stable growth in the region and needs to consolidate and refocus its business in niche drugs to remain competitive in a changing global business environment. Ranbaxy wants to move away from generics to become a more internationalized and R&D based company like Lilly, but needs significant cash flow in order to grow abroad. Both firms are considering options for the future. Problem statement Eli Lilly-Ranbaxy, a joint venture in India must re-evaluate the direction of their business relationship. Though...
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...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 the partners. Dr. Lorenzo Tallarigo at Eli Lilly must decide whether to continue the joint venture with Ranbaxy in India based on...
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...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 formulated sales distribution to wholesalers and pharmacies, week intellectual property rights, competing generics selling at 1/60th of comparable US prices and a high-volume, low-price and low-profits), the JV proposed by Ranbaxy and pursued by Eli Lilly was definitely the right strategy to adopt. The decision to enter a JV with Ranbaxy allowed Eli Lilly to develop its credibility in India...
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...Summary This report provides an analysis and evaluation of the case study “Eli Lilly in India”. The general overview of the case study is the discussion of the Joint Venture agreements between two parties. Eli Lilly a reputable pharmaceutical company entered the Indian market in a joint venture agreement with Ranbaxy. The joint venture between both parties was initially a positive move, they both had an increased market share, and were driving earnings, and the relationship between both companies was positive without negative circumstances. Thus, the issue problem arose when the partnership was at an impasse, both of the companies had different perspectives on the future of the joint venture, while Ranbaxy Laboratories Limited felt that generics would be most suitable for the future development of the company, Eli Lilly and Company were focused on growth and innovation. They had both made their mark within the growing Indian economy, though other firms began to flood the market. The decision had to be made whether Eli Lilly would continue to use Ranbaxy as an intermediate or would it be better for them to rethink the joint venture as they were seeking something that Ranbaxy wasn’t, stable growth in the global business environment. The company background, the current situation and any competitive issues. Eli Lilly & company works to discover and bring life changing medicines to those who need them, improve the understanding and management of disease, and give back to communities...
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...Organizational change………………………………………………………………….. Types of Organizational change…………………………………………………… Change Process…………………………………………………………………………….. Types of change …………………………………………………………………………. Planning the change process………………………………………………………….. Planning Change Models …………………………………………………………………. Change at Ranbaxy………………………………………………………………………….. Models for change…………………………………………………………………………… Guidelines for successful change management……………………………………. Human factors involved in the proposed change………………………………. Reasons for resistance to change:……………………………………………………… Process of implementing the change…………………………………………………. Change Management…………………………………………………………………………. Evaluation……………………………………………………………………………………… Conclusion…………………………………………………………………………………………. PURPOSE: This report try to explain the organizational change implemented by the company named Ranbaxy and how effectively they managed the change and how they met with success in achieving their objectives. For the purpose of this report, the cultural change Ranbaxy implemented and post merger integration of the R&D department of the company in 2008 is considered. 1. Introduction In the present world of fierce competition in the industrial field, organizational change is unavoidable. The changes in an organization will leads them to success or it may result in...
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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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...To: VP of Ranbaxy Travels From: Sai Krishna Bhimavarapu Re: Introduction of travel plans for the Baby Boomers Date: May 30, 2012 “Life begins at 40”. This is the new age mantra for the BOOMERS. These are the people who have the time, the money and the desire to spend. Being highly capable of making decisions for themselves and being aware of the outside world, they are able to perform the activities with ease. Like the younger generation, they are also very enthusiastic about what they do and what they look like to others. Per the U.S Census, the median income of the average U.S household (age 45-55) is about $85,000. This income is post expenditures which is available at their disposal. These Boomers want to travel the world since they the time and money. As Saint Augustine said “The world is a book, and those who do not travel read only one page". Therefore, Using this, I suggest that our travels should focus of introducing travel plans for the baby boomers. A Second Honeymoon Most of these people have spent their life looking after their loved ones and kids. The spouse is most often forgotten or taken for granted. We can focus on a product called ‘second honeymoon’ to the couples. it would be an amazing idea to actually give them a package which would make them feel young again. With the power of buying and the increasing options for international travel, these people can actually visit places they have only heard of in television shows. The boomers can actually...
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...of Ranbaxy) will become the second largest shareholder of Sun Pharma with a 9% stake. • Daiichi Sankyo has also agreed to indemnify the merged entity for costs and expenses incurred in Ranbaxy’s recent settlement with the US Department of Justice in regards to its Toansa facility in India. • The merger will see Sun Pharma’s revenue jump by a whopping 40% but its operating profits will rise by a meagre 7.5% based on pro forma 2013 financials. Its operating profit margin will decline from 44.1% to 29.2%. Therefore, the merger will have a negative effect on its performance in the near...
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...Question1: Did Eli Lilly pursue the right strategy to enter the Indian market? In 1993 Eli Lilly, one of the leading pharmaceutical firms in the USA, started a joint venture in India with the leading Indian company Ranbaxy. The decision was dictated by the conditions of the US market and opportunities of the Indian market. Costlier manufacturing practices due to strict governmental control, soaring prices in 1990s, invasion of cheap generics to the USA market as opposed to low costs in India and new regulations that opened Indian market to foreign investments (up to 51%) created tempting conditions to enter one of the emerging huge markets of the world. Alliance with Ranbaxy was a smart strategy for Eli Lilly to establish its presence in India. Ranbaxy was the second largest manufacturing company of bulk drugs and generics with domestic market share of 15% in India with established distribution network and the second largest exporter to different countries, including Russia (which Eli Lilly was attempting to reach), with capital cost 50-75% lower than those of comparable US plant and R&D expenses of 2-5% of sales. Besides, Ranbaxy developed its own process for Eli Lilly's patented drug Cefaclor. Since Eli Lilly's product patent for Cefaclor expired in 1992 and the firm was expecting to protect its monopoly with process patents which were due to expire only in 1994, this gave great scope for a mutually advantageous agreement between the two companies. There was also possibility...
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...CASE 6.3 ELLY LILLI IN INDIA: RETHINKING THE JOIN VENTURE STRATEGY Summary: The case consists of two major pharmaceutical companies that joint to collaborate their research and pharmaceutical technologies to start a joint venture in India. Both have valuable resources that have benefited both companies during the joint venture. Now both are questioning if there is still any value in maintaining the joint venture in India and will be deciding what will be the best route to take. Ranbaxy Laboratories wants to be bought out, but Eli Lilly is worried of the financial implications of such move. There were two pharmaceutical companies that were looking for ways to expand globally to position themselves in a competitive advantage from their competitors. One was located in the United States, which was Eli Lilly and Company and the other one was located in India, which was Ranbaxy Laboratories. Research and development was crucial to Lilly’s long-term success. Ranbaxy Laboratories was a firm that was evolved into a serious research-oriented firm. With the change, in the government, India was attracting foreign investors in the pharmaceutical industry. Lilly decided to form the joint venture in India to focus on marketing Lilly’s drugs there, and a formal JV agreement was signed in November 1992. The main key issues of this case are as follow. The pharmaceutical industry had come about through both forward integration from the manufacture of organic chemicals and a backward integration...
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