Eli Lilly and Ranbaxy Case
Autor: VanessaZ • February 12, 2015 • Essay • 451 Words (2 Pages) • 1,153 Views
- Was the country wrong? Why India?
No, the country was not wrong. First of all, India is a developing country, which has large number of populations. Most of pharmaceuticals was dependent on imports, simultaneously, Indian drug prices among the lowest in the world. In addition, foreign direct investment was encouraged by increasing the maximum limit of foreign ownership to 51 per cent (from 40 percent) in the drugs and pharmaceutical industry. In other words, it is a huge market, and Lilly has opportunities to expand the market share and got profits in India.
- Was deciding to partner wrong? Is partnership a good or bad thing?
In my opinion, Lilly and Ranbaxy was good partner as well as has a better partnership. As the leader, Ranbaxy, it is a global corporation, and grew to become India’s largest manufacturer. However, Lilly was a name that most Indian people did not accept. Lilly was able to utilize Ranbaxy’s brand to enter the Indian market as well as make the Indian people to know it. Moreover, Ranbaxy has a power to help Lilly obtain the government approvals and licenses for their distribution network.
- Was the partner choice wrong?
No, Eli Lilly makes a good choice. Ranbaxy is a good partner. For the aspects of distribution network, it not only from the policies is helpful to Lilly, but also from the market recognized aspect to help Lilly enter in Indian market. Lilly just need to paid the service fee for Ranbaxy, and save the money on setting up a distribution network.
- Was the JV structure wrong?
No, the JV structure was not wrong. In a new market, it is an important depends on corporate with the outside country firm, if they want to improve competitiveness and expand market share. The JV structure is a fair way for the company to maintenance their authority. Each firm had three directors for the board of directors and one director for the management committee. Meanwhile, Lilly obtained 50 percent of shareholding and Ranbaxy obtained the other 50 percent of shareholding, they had equal equity ownership.
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