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Ranbaxy- No more an Indian
Multinational
Presented By:
AmanSuraj
Renuka
Priyanka
Poonam
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Introduction
Ranbaxy Laboratories Limited (Ranbaxy), India's largestpharmaceutical company, is an integrated, research ba
sed, international pharmaceutical company, producinga wide range
of quality, affordable generic medicines, trusted by healthcare professionals and patients across geographies .
Ranbaxy today has a presence in 23 of the top 25pharmaceutical markets of the world. The Company
has a global footprint in 46countries, world-classmanufacturing facilities in 7 countries and servescustomers in over 125 countries.
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Company Background
Incorporated as Ranbaxy Laboratories in June1961. Became public in 1973.
First Plant was at Okhla New Delhi.
Has Manufacturing facility in 11 countries.
Serves customer in over 125 countries.
CAGR- 19% over Last 5 Years.
Comes under top 10 Generic company in World.
Primary Aim- Distribute Locally the medicines of
foreign pharmaceutical companies.
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Summary
1937 ,Started as a local distributor ofmedicines of foreign pharmaceuticals.
Underwent crisis but managed to set up first
plant at Okhla in New Delhi in 1960 Realized success was in internationalizing
Export , patent regime , legal conflicts ,
acquisitions , research , generic brand , routeto expand and future strategies
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Important Facts
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Reasons to internationalize rather
than focusing on Home Market
Profit Margin Overseas was substantially higher. Acquired capabilities for going international.
US was the largest generic market in world (45%).
Price differential between generic & branded
drugs is higher in foreign market.
Congress support for generics.
Large Market size.
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Challenges for International Expansion
being from Developing Nation
Indias image is poor in world market.
Indian Quality is average.
Made in India label is unattractive. Ranbaxy major decisions were based on Indian
market but in international scenario US market
was the key driver. General Perception- Only western company can
manufacture high quality pharmaceutical.
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Factors Contributing to Ranbaxys
success
28.1
27.7
24.1
5.914.2
Revenue Composition (in %)
Asia
North America
Europe
CIS
Rest
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Factors Contributing to Ranbaxys
success
Low Cost.
Competitive advantage.
Global generic opportunities. Worldwide demand for low health care cost.
Quality manufacturing.
First Indian company to take advantage of newpatent act, 1970. (Product patent to Process
patent).
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Challenges Ahead
Maintain Leadership position.
Future strategy needs to aim at increasing
significance of research-based formulations.
Has to focus intensely on Innovation.
Compete with best in quality yet maintain low
costs.
Gestation Period- 8 to 10 years for research. Move rapidly from generic dosage to branded
formulations to maintain competitiveness.
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Internationalization
Hired export manager in 1969.
Low volume export order high profitability.
New patent act in 1970. Enabled firms to sell drugs at fraction of cost
compared to MNCs in India as well as abroad.
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Internationalization Process Bringing a change in the exports mindset was the first
major step taken.
In 1992, 6 to 8 months were spent studying what Ranbaxylaboratories really wanted to be. Three elements emergedunder this:
- First, Ranbaxy decided that the company will not look into
diversification into unrelated or even related areas and itwill stick to its core area of pharmaceuticals;
- Second, it stated its intent to be an international company.This implied a focused & rapid expansion into foreigncountries.
- It clarified it will be a research based company, whichmeant that it will discover its own proprietary innovativedrugs, to leverage in the era of worldwide intellectualproperty rights.
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Strategic Alliances
Ranbaxy entered into strategic alliance with ELI
LILLY just to market some of the selected productsof Eli Lilly. Moreover it can be understood thatRanbaxy would be expecting to grow its marketshare in USA with the help of Eli Lilly in near future.
Ranbaxy entered into strategic alliance with BayerAG just to market their products by BAYER AGglobally ,where BAYER AG obtained exclusive
development & worldwide marketing rights to anoral once daily formulation of CIPROFLOXACIN,which was originally developed by Ranbaxy.
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Strategies to enter into global market
EXPORTING which is selling goods and services produced inhome countryto other markets.
JOINT VENTURE where in two or more "parent" companiesagree to sharecapital, technology, human resources, risks andrewards in a formation of anew entity under shared control.
STRATEGIC ALLIANCEWhich is a formal relationship betweentwo or more parties to pursue a set of agreed upon goals orto meet a critical businessneed while remaining independentorganizations.
ACQUSITION which is a corporate action in which a company
buys most, if not all, of the target company's ownershipstakes in order to assume control of the target firm.