Final Ib Ranbaxy

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Imperatives of entering China for Ranbaxy

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Final Ib Ranbaxy

  1. 1. Presented By: Abhinav Arya (08EM-002) Abhishek Verma (08EM-004) Ajay Kant Sehgal (08EM-005) Amandeep Singh (08EM-007) Amit Agarwal (08EM-009) Pankaj Gautam (08EM-025)
  2. 2. Product Range
  3. 4. Ranbaxy Company Overview <ul><li>Established in 1961, Ranbaxy Laboratories is India’s largest pharmaceutical and ranks 9 th worldwide as a generics drug manufacturer </li></ul><ul><li>Ranbaxy Laboratories Limited has its products sold in over 100 countries and manufactured in seven countries </li></ul><ul><li>a strong global presence ,over 78% sales from overseas markets </li></ul><ul><li>array of quality, generic products </li></ul>
  4. 5. India: Pharmaceuticals <ul><li>The Indian pharmaceutical industry at $6.5 billion and growing at 8-10% annually, is the 4th largest pharmaceutical industry in the world. </li></ul><ul><li>Its exports are over $2 billion. India is among the top five bulk drug makers and at home, the local industry has edged out the Multi-National companies whose share of 75% in the market is down to 35%. </li></ul><ul><li>Trade of medicinal plants has crossed $900M already. </li></ul>
  5. 6. <ul><li>There are 170 biotechnology companies in India, involved in the development and manufacture of genomic drugs, whose business is growing exponentially. </li></ul><ul><li>Sequencing genes and delivering genomic information for big Pharmaceutical companies is the next boom industry in India . </li></ul>India: Pharmaceuticals
  6. 7. Issues of Concern <ul><li>To discuss company strategies for sequencing the penetration of countries and committing resources </li></ul><ul><li>To explain how clues from the environmental climate can help managers limit geographic alternatives </li></ul><ul><li>To examine the major variables a company should consider when deciding whether and where to expand abroad </li></ul><ul><li>To overview methods and problems of collecting and comparing information internationally </li></ul><ul><li>To describe some simplifying tools for determining a global geographic strategy </li></ul><ul><li>To introduce how managers make final investment, reinvestment, and divestment decisions </li></ul>
  7. 8. OBJECTIVES STRATEGIES Overlaying Tactic: Choice of Countries <ul><li>Choosing new locations </li></ul><ul><li>Scan for alternatives </li></ul><ul><li>Choose and weight variables </li></ul><ul><li>Collect and analyze data for variables </li></ul><ul><li>Use tools to compare variables and </li></ul><ul><li>narrow alternatives </li></ul><ul><li>Allocating among locations </li></ul><ul><li>Analyze effects of reinvestment versus </li></ul><ul><li>harvesting in existing operating locations </li></ul><ul><li>Appraise interdependence of locations </li></ul><ul><li>on performance </li></ul><ul><li>Examine needs for diversification versus </li></ul><ul><li>concentration of foreign operations </li></ul><ul><li>Making final decisions </li></ul><ul><li>Conduct detailed feasibility for new locations </li></ul><ul><li>Estimate expected outcome for reinvestment </li></ul><ul><li>Make location and allocation decisions based </li></ul><ul><li>on company’s financial decision-making tools </li></ul>Flowchart for Choosing Where to Operate
  8. 9. Recent Acquisitions & Alliances
  9. 10. Ranbaxy Strategy <ul><li>Vision of the company meets the strategic goals of the company </li></ul><ul><li>Key to Success is </li></ul>
  10. 11. 90’s 80’s Ranbaxy’s Strategy over the years Strategy India       Exports      International   Markets Developing     Emerging       Advanced   Products API, Dosage Form Generics, Branded Generics Competencies Backward integration Developmental research, Regulatory, Manufacturing, Marketing
  11. 12. <ul><li>Steps involved were </li></ul><ul><ul><ul><li>Creating intellectual property </li></ul></ul></ul><ul><ul><ul><li>Expanding markets </li></ul></ul></ul><ul><ul><ul><li>Contemplating competencies through alliances </li></ul></ul></ul>
  12. 13. PESTEL <ul><li>Political </li></ul><ul><li>Strong government support to the foreign investors. </li></ul><ul><li>Government Stability </li></ul><ul><li>Economic </li></ul><ul><li>Low labor cost levels </li></ul><ul><li>Mass production capacity </li></ul><ul><li>Market was open to FDI </li></ul><ul><li>China was maintaining its inflation under 9% </li></ul><ul><li>Poor infrastructure </li></ul><ul><li>High Tax Rate </li></ul>
  13. 14. <ul><li>Social </li></ul><ul><li>Large population growth </li></ul><ul><li>Shift in mindset of Chinese people </li></ul><ul><li>More emphasis on health </li></ul><ul><li>Technological </li></ul><ul><li>China was technologically advance </li></ul><ul><li>The technology usage for strategy & collaborative purposes was not effective </li></ul>
  14. 15. <ul><li>Environmental </li></ul><ul><li>Liberal environmental regulations </li></ul><ul><li>Legal </li></ul><ul><li>97% of the raw material produced in china were copied drugs from US </li></ul><ul><li>Since 1 January 1993, the government exercised patent law protection </li></ul>
  15. 16. SWOT
  16. 17. Strategic alliances (within dotted areas) Choice of Entry <ul><li>Non-Equity modes </li></ul><ul><li>Equity (FDI) modes </li></ul><ul><li>Greenfield investments </li></ul><ul><li>Minority JVs </li></ul><ul><li>Direct exports </li></ul><ul><li>Licensing/ franchising </li></ul><ul><li>Acquisition </li></ul><ul><li>50/50 JVs </li></ul><ul><li>Indirect exports </li></ul><ul><li>Turnkey projects </li></ul><ul><li>Others </li></ul><ul><li>Majority JVs </li></ul><ul><li>Others </li></ul><ul><li>Contracted R&D </li></ul><ul><li>Wholly owned subsidiaries </li></ul><ul><li>Alliances and joint ventures (JVs) </li></ul><ul><li>Exports </li></ul><ul><li>Contractual agreements </li></ul><ul><li>Co-Marketing </li></ul>
  17. 18. Porter Diamond Model
  18. 19. <ul><li>Almost 50% of the Pharmacy company’s were of new drugs indigenously produced in china </li></ul><ul><li>Rest all of the manufacturers contributed for 50% of manufacturer’s </li></ul>Products Number % Chemical drugs 1483 45.5 Traditional Chinese Medicine 946 29.0 Medical apparatus 570 17.5 Other medical materials 258 8.0 Total 3257 100
  19. 20. <ul><li>Double digit growth from in five years of 85-90 </li></ul>Year Output(ton) 1980 3964.5 1985 147832.8 1990 209300.0
  20. 21. %age Contribution Direct sale by pharmaceutical manufacturers; 25 State-owned nationwide sales network; and 50 Specialized medication wholesalers and retailers. 25
  21. 22. Type Number % Chemical drugs 475 38.2 TCM & Nutraceuticals 324 26.2 Medical equipment & devices 234 18.8 Health care consumables 112 9.0 Biological & chemical agents 67 5.4 Packaging machinery & materials 30 2.4 Total 1242 100
  22. 23. Year Total Growth(%) 1980 660.36   1985 971.41 47.1 1990 1605.28 65.3 1992 4796.81 198.8
  23. 24. <ul><li>Increasing demand </li></ul><ul><li>High priority in the government's modernization plan </li></ul><ul><li>Encouragement of foreign investment </li></ul>
  24. 25. <ul><li>Effects of the new patent regulations </li></ul><ul><li>GMP (Good Manufacturing Procedures) Standard </li></ul><ul><li>Effect of the reform of the public health system </li></ul><ul><li>Policies on foreign capital and technology </li></ul>
  25. 26. Conclusion <ul><li>With all the analysis of PESTEL & Porter Diamond Model, we conclude that Ranbaxy should enter China. </li></ul>
  26. 27. <ul><li> Thanks </li></ul>

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