SM Assignment

Submitted by Group-1

Sarbani Sahu

Anshul Maheshwari

Anjali Parekh

Shubham Shibasis Garnaik

Himanshu Shende

Homal Ivnati

1) Did Eli Lilly pursue the right strategy to enter the Indian market? 

Yes, Eli Lilly did the right strategy of coming in joint venture with Ranbaxy as it could
establish a good market base in India. Through this venture in November 1992, Lilly
wanted to focus on the marketing of its drugs and further selling generic drugs. Later after
the formation of Eli Lilly Ranbaxy, they launched products and employed more than 200
people, with the exchange of both tacit and explicit knowledge. The advantage of the joint
venture was the following:

 It helped them to build strong tie in Indian market

 It helped them to develop trust and commitment with doctors.
 It may be required for institutional setting with Ministry of Health and Indian
government regarding pricing and regulations.
 It became the 12th leading pharmaceutical suppliers in the world by 1995.
 It also entered into new segments of diabetics and oncology

2) Carefully consider the evolution of the joint venture. Evaluate and identify the unique
challenges faced in the three successive phases of evolution of the JV. 
Initial Lilly Ranbaxy Joint Venture
When Ranbaxy approached Lilly for supplying certain active ingredients and
supplying of low-cost intermediate pharmaceutical products, they decided to form the
joint venture to focus on the joint venture so that they can concentrate on the
marketing of Lilly’s drug and it also started extending its operations to include to
 generics. Influenced by the vision of Dr. Singh, the vice chairman of Ranbaxy to
become the leader in innovation driven company.
The Start-up
In 1993, Andrew and Gulati worked on the venture together in the Ranbaxy set up the
joint venture “Eli Lilly Ranbaxy and hired a financial analyst after which the team
grew from there. By the end of the year, the venture moved to an independent place
and started developing trust of the doctors. They had both the identities of the to the
JV without any politics. The first product of the JV was the human insulin along with
several other Ranbaxy products but the team was facing challenges regarding
government regulations and pricing. Product and marketing strategies had to be
adopted to suit the market conditions.

The Mid-term organizational changes

Chris Shaw was the managing director of the joint venture and he focussed on
building systems and processes to bring stability to the fast-growing organization. He
faced challenges on the sales and marketing side for which it hired McKinsey and
later, regarding General Agreement on Tariff and Trade signed by India that would
give patent recognition. The expansion of product line also took place. By 2001, the
venture was recording very good growth and became the 46th largest pharmaceutical
company in India.
3.How would you assess the overall performance of the JV? Do the partners need
each other now?

y takeaways
During the strategic alliance, a number of things were learnt by the two partners:
Eli Lilly
The IJV allowed Eli Lilly to acquire the knowhow of how to tackle a culturally distant
market, crucial to pursue its global strategy. Furthermore, Lilly learnt how to deal with an
undeveloped legal framework and with foreign regulatory agencies to handle the product
approval processes with the government.
Ranbaxy
The Indian partner learnt how effectively implement a framework of corporate values in
the organisation and the actual benefits that derive from them in terms of
ethical
marketing. Moreover, this IJV was used to make experience and then start several IJV in
other markets to pursue the internationalisation strategy. Finally, since Lilly was
an
innovative company, Ranbaxy learnt how to manage a R&D process from an international
standpoint.
y takeaways
During the strategic alliance, a number of things were learnt by the two partners:
Eli Lilly
The IJV allowed Eli Lilly to acquire the knowhow of how to tackle a culturally distant
market, crucial to pursue its global strategy. Furthermore, Lilly learnt how to deal with an
undeveloped legal framework and with foreign regulatory agencies to handle the product
approval processes with the government.
Ranbaxy
The Indian partner learnt how effectively implement a framework of corporate values in
the organisation and the actual benefits that derive from them in terms of
ethical
marketing. Moreover, this IJV was used to make experience and then start several IJV in
other markets to pursue the internationalisation strategy. Finally, since Lilly was
an
innovative company, Ranbaxy learnt how to manage a R&D process from an international
standpoint.
Eli Lilly
The IJV allowed Eli Lilly to acquire the knowhow of how to tackle a culturally
distant
market, crucial to pursue its global strategy. Furthermore, Lilly learnt how to deal with an
undeveloped legal framework and with foreign regulatory agencies to handle the product
approval processes with the government.
Eli Lilly
The IJV allowed Eli Lilly to acquire the knowhow of how to tackle a culturally
distant
market, crucial to pursue its global strategy. Furthermore, Lilly learnt how to deal with an
undeveloped legal framework and with foreign regulatory agencies to handle the product
approval processes with the government.
Eli Lilly
The IJV allowed Eli Lilly to acquire the knowhow of how to tackle a culturally
distant
market, crucial to pursue its global strategy. Furthermore, Lilly learnt how to deal with an
undeveloped legal framework and with foreign regulatory agencies to handle the product
approval processes with the government.
Eli Lilly
The IJV allowed Eli Lilly to acquire the knowhow of how to tackle a culturally
distant
market, crucial to pursue its global strategy. Furthermore, Lilly learnt how to deal with an
undeveloped legal framework and with foreign regulatory agencies to handle the product
approval processes with the government.
Eli Lilly
The IJV allowed Eli Lilly to acquire the knowhow of how to tackle a culturally
distant
market, crucial to pursue its global strategy. Furthermore, Lilly learnt how to deal with an
undeveloped legal framework and with foreign regulatory agencies to handle the product
approval processes with the government.
Overall performance of the alliance was forward and positive. It became the 46th
largest pharmaceutical company but alongside several multi-national companies were
shut down. But they do not need each other now.
Financial were improved from 560 to 876 in three years along with increase in Eli
marketing expenses. Eli needed Ranbaxy to understand the culturally distant market
which is difficult to take forward its global strategy and to deal with legal regulations.
Ranbaxy was benefitted in terms of gaining international presence and managing an
efficient R&D process. But Ranbaxy’s idea to divest the JV and invest in generic
manufacturing is correct and it is fair for the company to expect a reasonable return
on the initial capital. Ranbaxy provides manufacturing and logistics support to the JV
but breaking the JV requires large renegotiations.