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Presentation on Ranbaxy's global business strategy by prashanth kumar gujja.

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  • 1. RANBAXY LABORATORIES LTD By G. Prashanth kumar 11MBMA59.
  • 2. Overview India’s largest pharmaceutical company Worldwide Presence • Ground presence in 49 countries, products sold in over 125 countries • Manufacturing locations in 8 countries Amongst the top 10 global generic pharma companies Global consolidated sales: US $ 2.1 Bn (2011) Highest R&D spender amongst Indian Pharmaceutical companies Over 14000 employees globally represented by 50 nationalities
  • 3. History 1937- Ranbaxy was founded by Ranjit Singh and Dr Gurbax Singh in Amritsar. 1952- Bhai Mohan Singh joined the company as a partner. 1961- First manufacturing plant in Okhla 1969- First real breakthrough came with Calmpose 1973-Ranbaxy goes public 1977-Ranbaxy first joint venture in Lagos (Nigeria) is setup 1983-A modern dosage forms facility at Dewas (MP) in India.
  • 4. contd… 1990-Ranbaxy got its first US Patent, for doxycycline 1993- Dr Parvinder Singh became CEO of Ranbaxy 1995- Acquisition of Ohm Laboratories of US. 1998- Ranbaxy enters USA, world’s largest pharma market with products under its own name. 1999- Devinder Singh Brar was appointed as CEO and Managing Director . 2000-Ranbaxy forays into Brazil, the largest pharmaceutical market in South America 2008- Daiichi- sankyo acquired over 51% stake in Ranbaxy Laboratories Ltd.
  • 5. Capitalisation of opportunities-1. Process Patent Act 19702. Price Control Act 1979
  • 6. Strategic planning In 1993- senior management underwent a strategic planning exercise- vision 2003. Aimed to achieve two milestones by the year 2003 1. $1 bn in revenues 2. Development of one new therapeutic molecule
  • 7. Strategies Growth Strategy The Globalization Strategy New drug and dosage form development and manufacturing
  • 8. Changing the product mix Replacing low margin bulk pharmaceuticals with higher margin formulations Value-added/ branded generics Non-branded generics New drug delivery system Proprietary molecules
  • 9. Mergers and Acquisitions Parvinder Singh has adopted global strategy through joint ventures and acquisition to achieve sustainable growth. He formed a joint venture Ranbaxy Guangzhou China Ltd (RGCL) in China in 1993 Entered into the US market with the acquisition of Ohm Labs- a generic formulation company. Global alliance with Eli Lilly to manufacture and market cefaclor in US in 1994. Acquired Thai Pharmaceutical Company Unicher in 1995 and formed Ranbaxy Unicher Co. Ltd (RUCL). He acquired another company Rima Pharmaceuticals, the semisynthetic pencillins maker to sell generics products in Europe.
  • 10.  His basic strategy was to keep the acquired units as profit centres which helped Ranbaxy to keep acquired firms self sufficient. The acquired centre was given full responsibility of profit and loss of the company. The regional managers were given high degree of autonomy. He had adopted three tier organizational structures. 1) senior managers 2) regional managers 3) country managers.
  • 11. Recent Acquisitions and alliancesTerapia (Romania) Zenotech (India)Be-Tabs (South Africa) Krebs (India)Allen (Italy) Jupiter Biosciences*(Ind.)Ethimed (Belgium) Cardinal Drugs (India)Mundogen (Spain) Auto-injector Tech.(USA)
  • 12. World class manufacturing facilities
  • 13. Upgrading R&D Ranbaxy possessed an applied R&D capability A new basic research capability have to be built from the ground up to support company’s objective In 1997 Ranbaxy spent $12.6 mn and increasingly $67 mn in 2003. In 1994 it opened a world class R&D facility in Gurgaon. Hiring foreign trained scientists In-licensing of molecules developed by Japanese pharmaceuticals Spending $100 mn over ten years.
  • 14. R&D New Drug Discovery Research  Novel Drug Delivery Systems Research focus on Infectious  Patented Platform Technologies diseases, Urology, Metabolic diseases  Several Products based on these and inflammatory/ respiratory disease technologies introduced in various areas markets Strong NCE Pipeline  Several NDDS based ANDAs 10 molecules in different stages of filed drug discovery  Helps in developing a differentiated product portfolio
  • 15. NCE PipelineDiscovery Preclinical/Clinical Candidates Phase I Phase IIProgramme Metabolic RBx 14374 RBx 10558 Diseases Type 2 Diabetes Dyslipidemia RBx 11160 Antimalarial Malarial Infection Urological RBx 11528 RBx 9841 Disorders BPH Overactive Bladder Anti Infective RBx 14255Anti-Infectives (GSK) CARTI* RTI RBx 14016, 11082Asthma/COPD (GSK) PDE IV Inh. •COPD: Chronic Obstructive Pulmonary Disorder •Community Acquired Respiratory Tract Infections •RTI: Respiratory Tract Infection
  • 16. Porter’s Five Forces Model of Competition Industry Competition  Bargaining Power of Competitors of Ranbaxy in India Suppliers. are:-  Ranbaxy depends on certaino Dr. REDDY‘s organic chemicals .o CIPLA  The chemical industry is again veryo NICHOLAS PIRAMAL competitive and fragmented.o AUROBINDO PHARMAo GLAXO SMITH KLINE o The suppliers have very lowo LUPIN bargaining power and the Ranbaxy can easily switch from theiro SUN PHRMACEUTICALS suppliers without incurring a veryo CADILLA HEALTHCARE high cost.o WOCKHARDT
  • 17. contd…. Bargaining Power of  Barriers to Entry Buyers  Most easily accessible industries Buyers are scattered and they for an entrepreneur in India. as such does not have power in  Capital requirement for an the pricing of the products. industries is low. Government with it’s policies  Creating the brand awareness is plays an important role in the key for the long term survival regulating pricing through the NPPA.
  • 18. contd… Threat of Substitute Products Substitute to allopathic medicine are Ayurvedic and Homeopathic medicine ,but these are not much in practice in India.
  • 19. Acquisition by Daiichi Ranbaxy was facing many issues such as  poor financial position,  no major R&D breakthroughs,  increasing price wars  stiff competition in the generics market. In order to maintain its growth and market position, Ranbaxy needed an influx of fresh funds.
  • 20.  Daiichi Sankyo wanted to manufacture low cost generics because of Japan government’s new policy In June 2008, Daiichi Sankyo acquired over 51% stake in Ranbaxy Laboratories Ltd at Rs. 737 per share. Malvinder Singh sold out his stake of 34.8% to Daiichi Sankyo . The new entity is a significant milestone in the Ranbaxy’s mission of becoming a research-based international pharmaceutical company. Ranbaxy’s competency of low cost manufacturing and Daiichi Sankyo’s competency of innovation will provide the new entity with a sustainable, long- term competitive advantage.
  • 21. Ranbaxy-Daiichi Sankyo: Key Synergies