Rethinking the Joint Venture Strategy in India

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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
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Furthermore, partnerships between pharmaceutical companies and biotechnology companies were growing rapidly.


Generic and unbranded drugs were becoming extremely popular, due to their comparable effects at a fraction of patented product prices. The socially distraught citizens of developing nations were able to benefit from the low prices, where adequate healthcare was scarce. The Prime Minister of India at the World Health Assembly in 1982 mentioned that, “The idea of a better world was one where medical discoveries [would] be free of patents and there will be no profiteering from life and death.”


Given that the United States is a developed country, it is fair to assume that it is technologically rich, with access to better facilities and institutions than a developing country such as India. The American educational system is among the finest in the world, which contributes to their high innovation and leadership in technological growth and advancement. Ranbaxy’ has also developed a core competency based on their chemical synthesis capability. This has allowed the company to compete with world-class technological leaders. Furthermore, Ranbaxy is able to achieve low capital costs, typically 50-75 percent lower than those of comparable US plants


While there are no current issues or concerns

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