Rethinking the Joint Venture Strategy in India
Executive Summary
The effects of globalization are prevalent in almost all industries world-wide; the pharmaceutical industry is no exception. Through the globalization of markets and production, there has been a dramatic shift in the last several years. Eli Lilly is a leading company in the US and throughout the world, and they’ve had to adapt to the trends that come as a result of globalization including moving operations overseas and capitalizing on advantages present in other markets. The company has done well in this department, as their products are available in over 130 countries. One of their large successes stories was creating a joint-venture with the leading Indian pharmaceutical provider Ranbaxy.
The two companies originally had very complimentary visions and aligned business models that made them a perfect fit for collaboration. However, after careful analysis of the business environment in India, observing the changing tastes of consumers and adaptation of new laws and policies, it is advisable for Eli Lilly to re-evaluate their relationship with their partner company. This report presents their options including the costs and benefits of each option along with one final recommendation and careful instruction for implementation.
Eli Lilly, like all firms competing in international markets, must focus on core competencies and ensure their focus is aligned with their company objectives. Often, firms lose-sight of these objectives and fall victim to unprofitable projects. Eli Lilly, with its reputation for innovation, has the potential to succeed in the Indian marketplace, with a tailored enough strategy. A variety of avenues exist for Eli Lilly. They may enter into negotiations with Ranbaxy and possibly get them to remain interested in the joint venture. They may cease-ties with the company and operate in the Indian market without a crutch. This report will highlight the different effects of each potential suggestion along with the strategic
The effects of globalization are prevalent in almost all industries world-wide; the pharmaceutical industry is no exception. Through the globalization of markets and production, there has been a dramatic shift in the last several years. Eli Lilly is a leading company in the US and throughout the world, and they’ve had to adapt to the trends that come as a result of globalization including moving operations overseas and capitalizing on advantages present in other markets. The company has done well in this department, as their products are available in over 130 countries. One of their large successes stories was creating a joint-venture with the leading Indian pharmaceutical provider Ranbaxy.
The two companies originally had very complimentary visions and aligned business models that made them a perfect fit for collaboration. However, after careful analysis of the business environment in India, observing the changing tastes of consumers and adaptation of new laws and policies, it is advisable for Eli Lilly to re-evaluate their relationship with their partner company. This report presents their options including the costs and benefits of each option along with one final recommendation and careful instruction for implementation.
Eli Lilly, like all firms competing in international markets, must focus on core competencies and ensure their focus is aligned with their company objectives. Often, firms lose-sight of these objectives and fall victim to unprofitable projects. Eli Lilly, with its reputation for innovation, has the potential to succeed in the Indian marketplace, with a tailored enough strategy. A variety of avenues exist for Eli Lilly. They may enter into negotiations with Ranbaxy and possibly get them to remain interested in the joint venture. They may cease-ties with the company and operate in the Indian market without a crutch. This report will highlight the different effects of each potential suggestion along with the strategic