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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.