Final Ib Ranbaxy

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)

Ranbaxy Company Overview Established in 1961, Ranbaxy Laboratories is India’s largest pharmaceutical and ranks 9 th worldwide as a generics drug manufacturer Ranbaxy Laboratories Limited has its products sold in over 100 countries and manufactured in seven countries a strong global presence ,over 78% sales from overseas markets array of quality, generic products

India: Pharmaceuticals The Indian pharmaceutical industry at $6.5 billion and growing at 8-10% annually, is the 4th largest pharmaceutical industry in the world. 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%. Trade of medicinal plants has crossed $900M already.

There are 170 biotechnology companies in India, involved in the development and manufacture of genomic drugs, whose business is growing exponentially. Sequencing genes and delivering genomic information for big Pharmaceutical companies is the next boom industry in India . India: Pharmaceuticals

Issues of Concern To discuss company strategies for sequencing the penetration of countries and committing resources To explain how clues from the environmental climate can help managers limit geographic alternatives To examine the major variables a company should consider when deciding whether and where to expand abroad To overview methods and problems of collecting and comparing information internationally To describe some simplifying tools for determining a global geographic strategy To introduce how managers make final investment, reinvestment, and divestment decisions

OBJECTIVES STRATEGIES Overlaying Tactic: Choice of Countries Choosing new locations Scan for alternatives Choose and weight variables Collect and analyze data for variables Use tools to compare variables and narrow alternatives Allocating among locations Analyze effects of reinvestment versus harvesting in existing operating locations Appraise interdependence of locations on performance Examine needs for diversification versus concentration of foreign operations Making final decisions Conduct detailed feasibility for new locations Estimate expected outcome for reinvestment Make location and allocation decisions based on company’s financial decision-making tools Flowchart for Choosing Where to Operate

Recent Acquisitions & Alliances

Ranbaxy Strategy Vision of the company meets the strategic goals of the company Key to Success is

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

Steps involved were Creating intellectual property Expanding markets Contemplating competencies through alliances

PESTEL Political Strong government support to the foreign investors. Government Stability Economic Low labor cost levels Mass production capacity Market was open to FDI China was maintaining its inflation under 9% Poor infrastructure High Tax Rate

Social Large population growth Shift in mindset of Chinese people More emphasis on health Technological China was technologically advance The technology usage for strategy & collaborative purposes was not effective

Environmental Liberal environmental regulations Legal 97% of the raw material produced in china were copied drugs from US Since 1 January 1993, the government exercised patent law protection

Strategic alliances (within dotted areas) Choice of Entry Non-Equity modes Equity (FDI) modes Greenfield investments Minority JVs Direct exports Licensing/ franchising Acquisition 50/50 JVs Indirect exports Turnkey projects Others Majority JVs Others Contracted R&D Wholly owned subsidiaries Alliances and joint ventures (JVs) Exports Contractual agreements Co-Marketing

Almost 50% of the Pharmacy company’s were of new drugs indigenously produced in china Rest all of the manufacturers contributed for 50% of manufacturer’s 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

Double digit growth from in five years of 85-90 Year Output(ton) 1980 3964.5 1985 147832.8 1990 209300.0

%age Contribution Direct sale by pharmaceutical manufacturers; 25 State-owned nationwide sales network; and 50 Specialized medication wholesalers and retailers. 25

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

Year Total Growth(%) 1980 660.36 1985 971.41 47.1 1990 1605.28 65.3 1992 4796.81 198.8

Increasing demand High priority in the government's modernization plan Encouragement of foreign investment

Effects of the new patent regulations GMP (Good Manufacturing Procedures) Standard Effect of the reform of the public health system Policies on foreign capital and technology

Conclusion With all the analysis of PESTEL & Porter Diamond Model, we conclude that Ranbaxy should enter China.

Final Ib Ranbaxy

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Final Ib Ranbaxy