Premium Essay

Case Analysis: Eli Lilly in India:

In: Business and Management

Submitted By jproyale
Words 863
Pages 4
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 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…...

Similar Documents

Premium Essay

Joint Venture Agreements

...Eli Lilly in India Case Study BUS 545 – Global Business Management May 31, 2015 Andrew Juarez Professor Barnett   Executive 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......

Words: 1097 - Pages: 5

Premium Essay

Eli Lilly in India Rethinking the Joint Venture Strategy

...Eli Lilly in India: Rethinking the Joint Venture Strategy To: Dr. Lorenzo Tallarigo, President of Intercontinental Operations From: Senior Operations Director Re: 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...

Words: 1871 - Pages: 8

Premium Essay

Mba Essay

...A “Calibrated Approach”: Pharmaceutical FDI and the Evolution of Indian Patent Law Web version: August 2007 Authors: Katherine Connor Linton and Nicholas Corrado1 Abstract India has charted its own intellectual property (IP) path over the last 35 years, attempting to foster the growth of a domestic pharmaceutical industry and access to medicine while, more recently, also addressing the requirements of the international IP regime. Multinational companies (MNCs) have responded to India’s movement towards compliance with the W TO intellectual property agreement, TRIPS, by increasing the quantity and quality of foreign direct investment (FDI) in the areas of pharmaceutical research and development (R&D) and manufacturing. By contrast, MNCs have adopted a more cautious attitude toward the patenting and commercialization of new pharmaceutical products in India, waiting to see how Indian courts and patent offices interpret the new laws, and awaiting the enactment of longdebated data protection legislation. The ultimate success of the Indian “calibrated approach” to fostering the domestic industry and access to medicine while also addressing international IP requirements remains to be seen. 1 Katherine Connor Linton (katherine.linton@usitc.gov) is the International Trade Analyst for Intellectual Property and Nicholas Corrado was a law student intern in the Office of Industries of the U.S. International Trade Commission (USITC). The views expressed are those of Ms. Linton......

Words: 6873 - Pages: 28

Premium Essay

Pharma Industry

...Bottom of Form |Read full version essay Case Analysis : Pharma Industry | |Case Analysis : Pharma Industry | |Print version essay is available for you! You can search Free Term Papers and College Essay Examples written by students!. | |Join Essays24.com and get instant access to Case Analysis : Pharma Industry and over 30,000 other Papers and Essays | | | | | |Category: Business | |Autor: anton 06 June 2011 ...

Words: 4303 - Pages: 18

Free Essay

Dddddd

...Chapter 1 expanding abroad: motivations, means, and mentalities Case 1-1 Cameron Auto Parts * Alex Cameron got the family biz when graduated in 2001, when the American economy fell into a recession * History * Auto Pact, big three ship car parts between Canada & US, with tariff free * Cameron focus on small engine parts and auto accessories * Car Sales dropped in 2000, because declining North America and entry of Japanese * High pressure for modernization and cost reduction * Operational survival: cut workforce, overtime, part-time, subcontracting * Recovery and diversification * The short-term future seemed positive, but the popularity of Japanese car forced it to diversify * Working as an OEM Cameron did little to be innovative * Alex brought in a team of designers, concentrating on developing products with a wider ‘non-automotive’ market appeal * The first year no progress, Alex lured away a key engineer from the Canadian firm, and mid-2003, developed its own line of flexible couplings * Marketing the new product * Hired eight field sales representatives, stress product quality, service and speed of delivery, but not price. * Financing plant capacity * Increasing sales of flexible couplings required a new separate plant, but the financial position is not strong enough to support it * Foreign markets * Took a European Patent * A licensing opportunity ...

Words: 18260 - Pages: 74

Premium Essay

Human Resource Management

...such operationalization and transformations raise. This course also gives understanding about the microeconomic of competitiveness of the nations where the firms plays important role to the development of the country competitiveness. The emphasis is on the identification and making of the strategic and organizational decisions that make the company able to compete globally. The course takes an action point of view — emphasizing application, execution and the framing and resolution of large, multidimensional problems. As such, it places students in a variety of international business situations, primarily through case studies, in different national environments both developed and emerging and for a variety of firms, large and small, manufacturing and service oriented, growing and mature, “new economy” and “old economy.” The emphasis is on making the kind of analysis that is likely to lead to the best possible decision in an imperfect and uncertain (but not necessarily unpredictable!) world and on making decisions as leaders should do. Course Overview The course is divided into five modules, which are. 1. Introduction to Managing International Business 2. Competitiveness and Global Business 3. Going Global Strategy 4. Operationalization of International Business 5. Issues and Challenge of International Business 1. Introduction to Managing International Business The first module give the basic understanding and framework of what is......

Words: 6165 - Pages: 25

Premium Essay

Kellog

...APPENDIX: Kellogg Consulting Club Practice Cases While most cases require multiple analytical techniques, the category indicates where the candidate will likely spend most of the time. SECTION I: Sample Case Interviews 1. 2. New Drug Launch Prozac SECTION II: Profitability/Operations 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Shamrock Chemical Chilled Beverages Distilled Spirits Commodity Manufacturer Snack Food Conglomerate ROIC Increase Agricultural Equipment Manufacturing Paint Manufacturer Super Regional Bank Local Banking Demand Cement Manufacturer Beverage Company Candy Company SECTION III: Industry Analysis/Growth 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. Direct Mail Retailer Selective Binding Case Iberia Gasoline Pricing Pipeline Company Permanent Light Bulbs Aluminum Can Manufacturer Science Industry Information Services Company Meat Packing Industry Video Games Merger Candidate in Chemical Industry Machine Loading Case Telecommunications Diversification Packaging Material Manufacturer Page 34 SECTION IV: Market Entry/Expansion/Investment 30. 31. 32. 33. 34. 35. 36. Corn Feed Company Buenos Aires ENT Consulting Firm (I) Concrete Manufacturer Healthcare Company Gas Manufacturer Vitamin Manufacturer Entry into China SECTION V: Market Sizing/Estimation/Brainteasers 37. 38. 39. 40. 41. 42. 43. Cigar Bar New Magazine Piano Tuners Cars in the Chicago Loop Chewing Gum Market Golf ball Market Entry Oil Refining Industry SECTION VI:......

Words: 23126 - Pages: 93

Premium Essay

Mercar

...Industry Snapshot The Indian pharmaceutical industry is highly dynamic and offers great opportunities for both domestic and foreign companies. The industry is estimated to have generated revenue worth US$ 13.1 billion in FY 2011, according to a new Research and Market’s report, “Indian Pharma Sector Forecast 2014.” India will emerge as a leading global player in pharmaceutical industry by 2020, securing a place among the top five major global markets, according to Ikon Marketing Consultant (IMC). Also, Associated Chambers of Commerce and Industry (Assocham) has said it expects the Indian pharmaceutical industry to reach US$ 20 billion by 2015, making it one of the world's top 10 pharmaceuticals markets. India has a strong local manufacturing base and domestic players are developing substantial international presence. Healthcare is also one of the largest service sector industries in India, in terms of revenue and employment. Rising health awareness and increasing government expenditure on healthcare sector is driving growth in the sector. Medical tourism and health insurance are also on a rise, with significant growth in healthcare sector and establishment of large number of hospitals, both public and private. The Indian healthcare industry, estimated at US$ 50 billion, is expected to reach over US$ 75 billion by 2012, and US$ 100 billion by 2015. Talent Challenges While specialised talent is critical for any knowledge industry, it is more so within the pharmaceuticals......

Words: 6445 - Pages: 26

Premium Essay

On the Development of Comprehensive Information Security Policies for Organizations

...within this field and also towards the identification of research material in support of the final dissertation. The annotated bibliographic reviews contained within this paper will work to provide information that will support my future research and provide experience in garnering and explaining the salient tenants of research material. NOTE: This paper will not include proper APA formatting as citations have been bolded to ensure the professor can discern where citations begin and end. Curtis, S. K. (2012). Commitment to cybersecurity and information technology governance: A case study and leadership model. (Doctoral dissertation). Retrieved from the ProQuest dissertation and thesis database. (UMI No. 3569139) The problem as described by the author in this quantitative study is senior managers are not using web analytic technology (WAT) and there is a lack of literature describing why this is the case. The purpose of this study is to “examine how management consultants perceive WAT” (p. 22). This study has seven hypotheses. Unified theory of acceptance use of technology (UTAUT) is the conceptual framework utilized by the author. The author utilized UTAUT with independent variables of social norm, performance expectancy and effort expectancy, facilitating condition and management consultants’ behavioral intention to accept WAT and the moderators of gender, age and experience to capture behaviors related to the intention to use information technology. There is an......

Words: 3359 - Pages: 14

Premium Essay

Global Pharma Industry

...Pharmaceuticals and Life Sciences Global pharma looks to India: Prospects for growth Table of contents Introduction 03 Background 04 A fast growing economy An expanding pharmaceutical market Government-provided healthcare improving, but private healthcare dominates Domestic market overview 09 Background Consolidation underway, despite challenges Contract manufacturing Vaccines Over the counter market holds significant potential Reaching the untapped rural market Growing Research & Development 15 Overview Clinical trials Biotech and biosimilars on track for growth Other growth areas Bioinformatics 20 Stem cell research Medical devices Global Pharma’s evolving business models and options in India 23 Background Export-oriented business (Contract Research and Manufacturing Services) Licensing Franchising Joint ventures Wholly-owned subsidiaries Practical concerns 27 Infrastructure Tax environment Counterfeiting Intellectual property Conclusion 30 Related reading: Pharma 2020 31 References 32 Acronyms 38 Introduction The pharmaceutical industry’s main markets are under serious pressure. North America, Europe and Japan jointly account for 82% of audited and unaudited drug sales; total sales reached US$773 billion in 2008, according to IMS Health. Annual growth in the European Union (EU) has slowed to 5.8%, and sales are increasing at an even more sluggish......

Words: 17333 - Pages: 70

Premium Essay

Swot

...Overview of the Chapter In an uncertain competitive environment, managers must engage in thorough planning to find strategies that will help their organization to compete effectively. This chapter explores the manager’s role as both planner and as strategist. It discusses various elements of the planning process, different kinds of plans, strategy formulation, and the challenge of strategy implementation. This chapter also contains a detailed explanation of SWOT analysis and Michael Porter’s business level strategies. Learning Objectives 1. Identify the three main steps of the planning process and the relationship between planning and strategy. (LO1) 2. Describe the different levels and types of planning and how they lead to competitive advantage. (LO2) 3. Differentiate between the main types of business-level strategy and explain how they lead to competitive advantage. (LO3) 4. Differentiate between the main types of corporate-level strategies and explain how they are used to strengthen a company’s business-level strategy and competitive advantage. (LO4) MANAGERMENT SNAPSHOT: Different Ways to Compete in the Soft Drink Business To compete in the soft drink industry, both Pepsi and Coke decided to build global brands by manufacturing soft-drink concentrate and selling it in a syrup form to bottlers throughout the world. Pepsi and Coke charge a premium price for the syrup and invest part of the proceeds into advertising to build and......

Words: 7810 - Pages: 32

Premium Essay

Globalizing Indian Manufacturing

........................ 8 Reverse currents: Going overseas for growth ............................... 9 Going global with pharmaceuticals .............................................. 9 The opportunity in the food chain ............................................. 10 Becoming suppliers of choice ..................................................... 10 Simplifying India for global retailers ........................................... 11 Multinational Companies Entering Indian Markets ................. 12 From India to the world.............................................................. 12 Beyond borders .......................................................................... 12 Operational Excellence in Indian Manufacturing ..................... 14 The importance of going lean .................................................... 14 In pursuit of quality .................................................................... 15 Global Policy Issues and Indian Manufacturing........................ 16 Learning from China’s growth.................................................... 16 China vs. India—separating reality from hype ............................ 16 Indian infrastructure supply chains ............................................. 17 Collaborating Across the Supply Chain: Customer and Supplier Management......................................................... 18 Innovative supply chains and innovative auctions ....................... 18 Negotiating......

Words: 22416 - Pages: 90

Premium Essay

Application of Lean and Jit Principles in Supply Chain Management

...years. can become a long-term philosophy for guiding organizations toward world-class performance. SCM is a concept that has flourished in manufacturing, originating from Just-In-Time (JIT) production and logistics. Today, SCM represents an autonomous managerial concept, although still largely dominated by logistics. SCM endeavors to observe the entire scope of the supply chain. All issues are viewed and resolved in a supply chain perspective, taking into account the interdependency in the supply chain. SCM offers a methodology to relieve the myopic control in the supply chain that has been reinforcing waste and problems. Construction supply chains are still full of waste and problems caused by myopic control. Comparison of case studies with prior research justifies that waste and problems in construction supply chains are extensively present and persistent, and due to interdependency largely interrelated with causes in other stages of the supply chain. The characteristics of the construction supply chain reinforce the problems in the construction supply chain, and may well hinder the application of SCM to construction. Previous initiatives to advance the construction supply chain have been somewhat partial. JUST IN TIME PRINCIPLES The various principles regarding just in time technique are: JIT Inventory Principle The generic methodology offered by SCM contributes to better understanding and resolution of basic problems in construction......

Words: 6899 - Pages: 28

Premium Essay

Novartis Analysis

...announcement. In 2015, Novartis decided to reorganize its production. Indeed Novartis Gave up his divisions dedicated to the veterinary care and to the vaccination to two Anglo-Saxon firms, Eli Lilly (United States) and GlaxoSmithKline (United Kingdom). As a consequence Novartis is now focusing on less activities in order to reinforce its hegemony in the healthcare industry. In this context, Novartis bought the oncology division of GSK to expand Novartis position in targeted therapies and small molecules positioning. This transaction enabled Novartis to manage a portfolio of 22 oncology and hematology medicines to treat more than 25 conditions in the world. Furthermore, Novartis has created a Consumer Healthcare joint venture with GSK In the sector of over-the-counter medicine enables Novartis to consolidate its positions on the self-medication market. Also the sector of generic medicines remains a priority for Novartis because the turnover of this sector is still increasing at a sustained pace. In 2013, the turnover of this sector was $9.2 billion. At last, Alcon is the leader on the ophthalmic products sector with sales that increased by 3 % in 2013 to reach a turnover of $10.5 billion. Its partnership with Google leads to predict numerous perspectives of evolutions in the long-term. Analysis: 1. CF In 2014, Novartis announced a cash flow from operating activities of $13.9 billion. Regarding 2013, it represents an increase of $0.7 billion, which can be......

Words: 3850 - Pages: 16

Premium Essay

Ranbaxy

...(FDA) approved facilities. US accounts for one-fourth of the Indian drug exports. The share of Indian pharma companies in the total approvals for generic drugs called Abbreviated New Drug Application (ANDA) has risen steadily. From 32 per cent in 2009, it went up to 38.5 per cent in 2013. Increasing share of Indian companies in total ANDAs approved by the USFDA can be attributed to increase spending by them for research and development (R&D) activities. As per CMIE’s database, the industry’s R&D expenses to sales ratio jumped to around five per cent in 2012-13 from around three per cent in 2003-04. The export of drugs from India is expected to grow by 4.2 per cent to USD 15.2 billion in 2013-14. Around USD 16.3 billion of drugs are likely to be shipped from the country in 2014-15. This translates into a growth of 7.3 per cent. In 2015-16, drug exports from India are expected to touch USD 17.5 billion, 7.7 per cent higher than the previous year. Many developing countries like Latin America and Africa have also opened doors for generic drugs due to ageing population, rising income levels, increasing lifestyle diseases and low penetration of modern medicines. Besides, many pharmaceutical companies are trying to redefine themselves by foraying into niche segments like oral contraceptives, dermatology, injectable oncology, pediatrics, primary care and custom research manufacturing services (CRAMS). Ranbaxy Laboratories Ltd. is India’s one of the largest pharmaceutical company. The......

Words: 11886 - Pages: 48