CASE STUDY

ANALYSIS

(Structural Evolution of Biocon)

Group 2
Faculty:
MBA - I, 20-22 Batch

Dr.. Smaraki Pattanayak Session : 2020-2021

Asst. Professor, SPO
Sub : SPO Date :
ASBM University 03.11.2020
 INTRODUCTION
Biocon Limited is a global bio-pharmaceutical and
healthcare based company based in Bengaluru which
focuses on invention of drugs and drug development.
The company is fueled by the concept of ‘business
driven science.
The organization is a reflection of it's
founder/chairperson/managing director’s personality,
Dr. Kiran Mazumdar Shaw, who leads the company
by example.
Organizational structure has evolved and grown with
time, and it is to be seen in the analysis if the
updation of the structure plays a crucial and an
effective role in contributing to the growth of the
BACKGROUND INFORMATION
The company began its operations from her garage in
Koramangla in 1978 with a meagre capital of Rs 10000 and
after their IPO launch in 2004, it's valuation reached $1.1
Billion, making it's management echelons millionaires
overnight. Biocon has a range of services and products in the
field of diabetology, oncology, nephrology and cardiology, at
par with the best bio-pharma companies in the world.
Irish entrepreneur Les Auchincloss, founder of Biocon
Biochemicals, Ireland established a JV with Dr. Kiran
Mazumdar Shaw, in a 30:70 stake share distribution
respectively.
Initially starting with enzyme manufacturing for different
sectors, after selling 20% stake to ICICI Bank and Mr.
Auchincloss selling his stakes to Unilever Group, and Unilever
Group taking over ICICI holdings, Biocon moved into
pharmaceuticals.
 ORGANIZATIONAL STRUCTURE
Biocon went on to open its subsidiary offshoots, namely Syngene(1994), a CRO unit dedicated to conduct
R&D activities for drug-development for third-party clients and Clingene(2000), focusing on facilitating
clinical level trials and testing. Later on, Biocon Limited became a corporate group holding company via
it's JV’s with AxiCorp,Germany(70%), BBPL, Cuba(51%), and NeoBiocon FZ LLC, Abu Dhabi(50%). The
corporate organizational structure is shown below.

Organizational Structure

Corporate Structure

2003 2008
 CASE STUDY ANALYSIS - SWOT
STRENGTHS WEAKNESSES

● Led by example by founder/chairperson Dr. Kiran ● Cost-cutting needs to be focused upon.

Mazumdar Shaw
● Organizational structure evolved from Functional to ● Marketing sector needs attention and importance.
Matrix structure.
● Stable and consistent hierarchical system with solid ● Stock market sentiment can affect finances of the
foundational leadership construct. company after IPO launch.
● Effective hiring process and high standards of
selection criteria set for candidates. ● Centralization of power can affect performances of
● Diversification of funds and robust investment in the subsidiaries.
R&D and corporate group holdings.
● Positive net profit(PAT) recorded in revenue stream.
● Mobilization of funds effectively and tapping on
available resources and areas of interest
strategically.
● Export boosts it's reserves and it's financial position
and opens now avenues for conducting business.
● It's subsidiaries in constant lookout at the market
and it's behaviour,trend, product development, etc.
 CASE STUDY ANALYSIS - SWOT
OPPORTUNITIES
● Advantage of being the first Indian biotech company
to export microbial enzymes to US and Europe.
● Capitalizes on practical and effective selection
process during hiring.
● Launching it's IPO in 2004 opened floodgates for
revenue and capital needed for expansion.
● Finding new markets for export and analyze demand
to develop and market new products.
● R&D for mainstream pharma and diverse range of
products across multiple market segments and
demographics.
THREATS
● Too much centralization of power will lead to slower
decision making process and in the end leading to an
over-burdened desk of the Managing Director.
● Different portfolios under a company needs a
complex web of management system and needs to
be updated and upgraded with time.
● Competition in Indian scenario has become tougher
and what seemed to be a monopoly doesnt exist
anymore. The organization needs to strategize as
the market develops and competition knocks at the
doors.
 CONCLUSION
Arriving at the question of this case study, will Biocon’s organizational structure will be effective in
the long run?

From the analysis conducted above, we can presume:

● The market heading towards perfect competition, cost-saving measures needs to be

reinforced.
● The subsidiary arms of the company will grow, and will in future need a free hand and an
independent management mechanism to continue operations in a profitable manner.
● Constant R&D of market scope and new products offering value to customers quintessential
to maintain relevance in the industry.

Thus, Biocon’s organizational structure, though very effective in the current scenario, will
undergo changes and re-structure itself pertaining to the circumstances, which has been the
approach of Dr. Kiran Mazumdar Shaw for optimal output and maximized returns.