it is an analysis of Dr. Reddy laboratory covering the topic, Porters five forces, Porters generic study, SWOT analysis and PESTLE analysis

1. By-
Shubham Kumar Dubey
Pooja Acharya
Ronak Shah
Dikshali Wagh
Hetal Vora
Vicky Soni

2. Introduction
• Dr. Reddy's Laboratories is an Indian
multinational pharmaceutical company
based in Hyderabad,Telangana, India. The
company was founded by Anji Reddy, who
previously worked in the mentor
institute Indian Drugs and Pharmaceuticals
Limited, of Hyderabad, India. Dr. Reddy's
manufactures and markets a wide range of
pharmaceuticals in India and overseas.
• The company has over 190 medications,
60 active pharmaceutical ingredients for
drug manufacture, diagnostic kits, critical
care, and biotechnology products.

3. Cont…
• By 2007, Dr. Reddy's had seven FDA plants producing
active pharmaceutical ingredients in India and seven
FDA-inspected and ISO 9001 (quality) and ISO
14001 (environmental management) certified plants
making patient-ready medications – five of them in
India and two in the UK.
• 2010, the family-controlled Dr Reddy's denied that it
was in talks to sell its generics business in India to
US pharmaceutical giant Pfizer, which had been
suing the company for alleged patent infringement
after Dr Reddy's announced that it intended to
produce a generic version of atorvastatin, marketed
by Pfizer as Lipitor, an anti-
cholesterol medication. Reddy's was already linked
to UK pharmaceuticals multinational Glaxo
Smithkline.

4. Pestle
Analysis of
Dr. Reddy
Political
factors
Economic
factors
Social
Factors
Technological
factors
Legal
Factors
Environment
factors

5. Political factors
• Legal framework for contract enforcement
• Intellectual property protection
• Trade regulations & tariffs related to
healthcare
• Favoured trading partners

6. Economic Factors
• Type of economic system in countries of
operation- What type of economic system
there is and how stable it is
• Exchange rates & stability of host country
currency
• Efficiency of financial markets- Does Dr.
Reddy ’s Laboratories limited needs to
raise capital in local market?
• Skill level of workforce in drug
manufacturers- Other industry
• Education level in the economy
• Labour costs and productivity in the
economy.

7. Social Factors
• Demographics and skill level of the
population
• Class structure, hierarchy and power
structure in the society
• Education level as well as education
standard in the Dr. Reddy’s Laboraties
industry Limited.
• Culture (gender roles, Social conventions)
• Enterpreneurial spirit and broader nature of
the society. Some societies encourage
entrepreneurship while some don’t.

8. Technological Factors
• Recent Technological developments by
Dr. Reddy’s Laboratories limited
• Technology’s impact on product
offerings
• Impact on cost structure in Drug
manufacturers- Other industry
• Impact on value chain structure in
Healthcare sector
• Rate of technological Diffusion

9. Environmental Factors
• Weather
• Climate change
• Laws regulating environment pollution
• Air and water pollution regulations in
drug manufacturers- Other industry
• Recycling
• Waste management in healthcare sector
• Attitudes towards “green” or ecological
products
• Endangered species

10. Legal Factors
• Anti-trust law in drug Manufacturers- Other
industry and overall in the country
• Discrimination law
• Copyrights, patent/ intellectual property
law
• Consumer protection and e-commerce
• Employment law
• Health and safety law
• Data Protection

11. Dr. Reddy's Laboratories Limited Porter
Five Forces Analysis
• Porter Five Forces Analysis is a strategic management
tool to analyze industry and understand underlying levers
of profitability in a given industry.
• Dr. Reddy's Laboratories Limited managers can use Porter
Five Forces to understand how the five competitive forces
influence profitability and develop a strategy for enhancing
Dr. Reddy's Laboratories Limited competitive advantage
and long term profitability in Drug Manufacturers.

12. What are Porter Five (5) Forces
In his revolutionary article - "Five Forces that
Shape Strategy", Michael Porter observed five
forces that have significant impact on a firm's
profitability in its industry. These five forces
analysis today in business world is also known as -
Porter Five Forces Analysis.
The Porter Five (5) Forces are –
•Threat of New Entrants
•Bargaining Power of Suppliers
•Bargaining Power of Buyers
•Threat from Substitute Products
•Rivalry among the existing players.

13. Threats of New Entrants
New entrants in Drug Manufacturers –
Other brings innovation, new ways of doing things and put
pressure on Dr. Reddy's Laboratories Limited through lower
pricing strategy, reducing costs, and providing new value
propositions to the customers.
How Dr. Reddy's Laboratories Limited can
tackle the Threats of New Entrants
•By innovating new products and services.
• By building economies of scale so that it can lower the fixed
cost per unit.
•Building capacities and spending money on research and
development.
•It significantly reduces the window of extraordinary profits for
the new firms thus discourage new players in the industry.

14. Bargaining Power of Suppliers
All most all the companies in the Drug Manufacturers - Other industry buy
their raw material from numerous suppliers. Suppliers in dominant position
can decrease the margins Dr. Reddy's Laboratories Limited can earn in the
market.
How Dr. Reddy's Laboratories Limited can tackle
Bargaining Power of the Suppliers
•By building efficient supply chain with multiple suppliers.
•By experimenting with product designs using different materials so that if the
prices go up of one raw material then company can shift to another.
•Developing dedicated suppliers whose business depends upon the firm. One
of the lessons Dr. Reddy's Laboratories Limited can learn from Wal-Mart and
Nike is how these companies developed third party manufacturers whose
business solely depends on them thus creating a scenario where these third
party manufacturers have significantly less bargaining power compare to Wal-
Mart

15. Bargaining Power of Buyers
Buyers are often a demanding lot. They want to buy the best offerings
available by paying the minimum price as possible. The smaller and
more powerful the customer base is of Dr. Reddy's Laboratories
Limited the higher the bargaining power of the customers and higher
their ability to seek increasing discounts and offers.
How Dr. Reddy's Laboratories Limited can
tackle the Bargaining Power of Buyers
•By building a large base of customers.
•This will be helpful in two ways. It will reduce the bargaining power
of the buyers plus it will provide an opportunity to the firm to
streamline its sales and production process.
•By rapidly innovating new products.
•New products will also reduce the defection of existing customers of
Dr. Reddy's Laboratories Limited to its competitors.

16. Threats of Substitute Products or
Services
When a new product or service meets a similar customer needs
in different ways, industry profitability suffers. For example
services like Dropbox and Google Drive are substitute to
storage hardware drives.
How Dr. Reddy's Laboratories Limited
can tackle the Treat of Substitute
Products / Services
•By being service oriented rather than just product oriented.
•By understanding the core need of the customer rather than
what the customer is buying.
•By increasing the switching cost for the customers.

17. Rivalry among the Existing Competitors
If the rivalry among the existing players in an industry is intense
then it will drive down prices and decrease the overall
profitability of the industry. Dr. Reddy's Laboratories Limited
operates in a very competitive Drug Manufacturers
How Dr. Reddy's Laboratories Limited can
tackle Intense Rivalry among the Existing
Competitors in Drug Manufacturers
•By building a sustainable differentiation
•By building scale so that it can compete better
•Collaborating with competitors to increase the market size
rather than just competing for small market.

18. Implications of Porter Five Forces on
Dr. Reddy's Laboratories Limited
By analyzing all the five competitive forces Dr. Reddy's
Laboratories Limited strategists can gain a complete
picture of what impacts the profitability of the
organization in Drug Manufacturers - Other industry. They
can identify game changing trends early on and can
swiftly respond to exploit the emerging opportunity. By
understanding the Porter Five Forces in great detail Dr.
Reddy's Laboratories Limited 's managers can shape
those forces in their favor.

20. • Generic Formulations, including tablets, capsules, injectables,
and topical creams, is the largest part of our business
portfolio, making products across the major therapeutic areas
of gastrointestinal ailments, cardiovascular disease, pain
management, oncology, anti-infective, pediatrics and
dermatology.

22. • Addressing unmet patient needs =As people continue to take
greater responsibility for their own health and wellness issues,
their needs change. Patients today are looking for more than
just safe, effective medicines. They require information,
coaching, and customized support to help them adhere to
complex treatment protocols.
Differentiation

23. Oncology
Anti-diabetic Gastroentrology
Therapeutic focus

24. SWOT Analysis of Dr.
Reddy's Laboratories

25. Strengths of Dr. Reddy’s
Laboratories
• Strong distribution network.
• Successful track record of developing new products
– product innovation.
• High level of customer.
• Good Returns on Capital Expenditure.
• Superb Performance in New.
• Strong Free Cash Flow – Dr. Reddy's Laboratories
Limited has strong free cash flows that provide
resources in the hand of the company to expand
into new projects.

26. Weakness of Dr. Reddy’s
Laboratories
• Not highly successful at integrating firms with different work
culture.
• Limited success outside core
• The profitability ratio and Net Contribution % of Dr. Reddy's
Laboratories Limited are below the industry average.
• There are gaps in the product range sold by the company.
This lack of choice can give a new competitor a foothold in
the market.
• High attrition rate in work force
• The marketing of the products left a lot to be desired. Even
though the product is a success in terms of sale but its
positioning and unique selling proposition is not clearly
defined which can lead to the attacks in this segment from
the competitors.

27. Opportunities for Dr. Reddy's
Laboratories Limited
• Organization’s core competencies can be a
success in similar other products field
• Opening up of new markets because of
government agreement .
• The new technology provides an opportunity to Dr.
Reddy's Laboratories Limited to practices
differentiated pricing strategy in the new market.
• New trends in the consumer behavior can open up
new market for the Dr. Reddy's Laboratories
Limited .
• New customers from online channel
• The new taxation policy can significantly impact
the way of doing business and can open new
opportunity for established players such as Dr.
Reddy's Laboratories Limited to increase its
profitability.

28. Threats Dr. Reddy's Laboratories
• Rising raw material can pose a threat to the Dr.
Reddy's Laboratories Limited profitability.
• Limitation of the counterfeit and low quality
product.
• New technologies developed by the competitor.
• Growing strengths of local distributors also
presents a threat
• As the company is operating in numerous
countries it is exposed to currency fluctuations
especially given the volatile political climate in
number of markets across the world.
• Changing consumer buying behavior from online
channel could be a threat to the existing physical
infrastructure driven supply chain model.

29. Competitive advantage
Value
Rare
Difficult to Imitate
Exploited by organisation