Eli Lilly In India

Alternative – Termination of Joint Venture

• Pros:
• Large number of opportunities are offered and is mature enough to operate in
Indian pharmaceutical industry.
• Existence of successful ELR in India providing Lilly with great interest to make
decisions with complete control over operations.
• Full control and technology integration and subsidiary know how in realization of
organizational strategy.
• Cons:
• It is expected for generation of huge financial commitments.
• Requirement of high investment in establishment of own channels of supply and
distribution.
Recommendation:

• Considering the fact of both organizations and pharmaceutical industry, as per

short-term strategy, Lilly should renegotiate with Ranbaxy as it had medium risk to
be failed and medium cost required on the basis of pros and cons of the
alternative.

• If as a short term strategy, this plan does not give potential outcome, then Lily
should go towards termination of joint venture.

• With the fact, there are low legal policies and regulations after India became
member of WTO. This is expected that as a result in coming three to five years,
Lilly as an individual organization will flourish more rapidly in an effective manner
as its R&D is also strong with high capability of performing clinical trials.
 Action Plan
Negotiation with Future Evaluation of Integration Ranbaxy in Outsource Development of own
Ranbaxy in terms of ELR: Value Chain of Eli Lilly: Manufacturing: Capabilities:
transfer of shares: Assessment of Promotion of good Negotiation of Lilly It involves evaluation
Positive development partner’s need which relation and operating with Ranbaxy for of ability for
of existing relation for may either be conditions i.e. outsourcing contract establishment of own
encouragement of permanent or favourable with for production and capabilities including
Ranbaxy for share temporary. Similarly, cooperation, honesty product distribution pros of 
transfer to Lilly. determination of and nurture considering length of outsource manufacturi
Discussion over operation’s outcome trust.Establishment of contract, ng
significant incentives which involves generic strong linkages among responsibilities and  and cost.
and concessions for vs patents, drug headquarters and outcome.
purchasing of shares at production and subsidiary for
set interval end. distribution, clinical structure institution of
trials and Research global learning.
and Development.
Evaluation to
capability for
production and
distribution of
products
independently.
 Conclusion

The recommendation of the strategy will help Lilly to retain its foothold

in India. Simultaneously, it will also enable the organization to take
benefit of existing positive and potential developments in market. The
organization will then have the ability to meet the sales target at
international level. In addition, maximum returns will be obtained with
increase in profitability.