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)

Product Range

Ranbaxy Company OverviewEstablished in 1961, Ranbaxy Laboratories is

India’s largest pharmaceutical and ranks 9th 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: PharmaceuticalsThe 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 ConcernTo discuss company strategies for sequencing the

penetration of countries and committing resourcesTo explain how clues from the environmental climate can

help managers limit geographic alternativesTo examine the major variables a company should consider

when deciding whether and where to expand abroadTo overview methods and problems of collecting and

comparing information internationallyTo describe some simplifying tools for determining a global

geographic strategyTo 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 companyKey to Success is

90’s80’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 wereCreating intellectual

propertyExpanding markets Contemplating

competencies through alliances

PESTELPolitical● Strong government support to the foreign

investors.● Government Stability

EconomicLow labor cost levelsMass production capacityMarket was open to FDIChina was maintaining its inflation under 9%Poor infrastructureHigh 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

EnvironmentalLiberal environmental regulations

Legal97% of the raw material produced in china

were copied drugs from USSince 1 January 1993, the government

exercised patent law protection

SWOTSWOT

•Non-Equity modes

•Equity (FDI) modes

•Greenfieldinvestments•Minority JVs•Direct exports

•Licensing/franchising

•Acquisition•50/50 JVs•Indirect exports •Turnkey projects

•Others•Majority JVs•Others •Contracted R&D

•Wholly ownedsubsidiaries

•Alliances and joint ventures (JVs)•Exports

•Contractual agreements

•Co-Marketing Strategic alliances (within dotted areas)Strategic alliances

(within dotted areas)

Choice of Entry

Porter Diamond Model

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

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

Year Output(ton)1980 3964.5

1985 147832.8

1990 209300.0

Double digit growth from in five years of 85-90

%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 47.11990 1605.28 65.31992 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.

Thanks