1. Presented By: Abhinav Arya (08EM-002) Abhishek Verma (08EM-004) Ajay Kant Sehgal (08EM-005) Amandeep Singh (08EM-007) Amit Agarwal (08EM-009) Pankaj Gautam (08EM-025)

2. Product Range

4. Ranbaxy Company Overview Established in 1961, Ranbaxy Laboratories is India’s largest pharmaceutical and ranks 9 th worldwide as a generics drug manufacturer Ranbaxy Laboratories Limited has its products sold in over 100 countries and manufactured in seven countries a strong global presence,over 78% sales from overseas markets array of quality, generic products

5. India: Pharmaceuticals  The Indian pharmaceutical industry at $6.5 billion and growing at 8-10% annually, is the 4th largest pharmaceutical industry in the world.  Its exports are over $2 billion. India is among the top five bulk drug makers and at home, the local industry has edged out the Multi-National companies whose share of 75% in the market is down to 35%.  Trade of medicinal plants has crossed $900M already.

6.  There are 170 biotechnology companies in India, involved in the development and manufacture of genomic drugs, whose business is growing exponentially.  Sequencing genes and delivering genomic information for big Pharmaceutical companies is the next boom industry in India. India: Pharmaceuticals

7. Issues of Concern To discuss company strategies for sequencing the penetration of countries and committing resources To explain how clues from the environmental climate can help managers limit geographic alternatives To examine the major variables a company should consider when deciding whether and where to expand abroad To overview methods and problems of collecting and comparing information internationally To describe some simplifying tools for determining a global geographic strategy To introduce how managers make final investment, reinvestment, and divestment decisions

8. OBJECTIVES STRATEGIES Overlaying Tactic: Choice of Countries Choosing new locations Scan for alternatives Choose and weight variables Collect and analyze data for variables Use tools to compare variables and narrow alternatives Allocating among locations Analyze effects of reinvestment versus harvesting in existing operating locations Appraise interdependence of locations on performance Examine needs for diversification versus concentration of foreign operations Making final decisions Conduct detailed feasibility for new locations Estimate expected outcome for reinvestment Make location and allocation decisions based on company’s financial decision-making tools Flowchart for Choosing Where to Operate

9. Recent Acquisitions & Alliances

10. Ranbaxy Strategy  Vision of the company meets the strategic goals of the company  Key to Success is  Vision of the company meets the strategic goals of the company  Key to Success is

11. 90’s80’s Ranbaxy’s Strategy over the years Strategy India          Exports        International    Markets Developing      Emerging        Advanced    Products API, Dosage Form Generics, Branded Generics Competencies Backward integration Developmental research, Regulatory, Manufacturing, Marketing

12.  Steps involved were  Creating intellectual property  Expanding markets  Contemplating competencies through alliances

13. PESTEL Political ● Strong government support to the foreign investors. ● Government Stability Economic Low labor cost levels Mass production capacity Market was open to FDI China was maintaining its inflation under 9% Poor infrastructure High Tax Rate

14. Social ● Large population growth ● Shift in mindset of Chinese people ● More emphasis on health Technological ● China was technologically advance ● The technology usage for strategy & collaborative purposes was not effective

15. Environmental Liberal environmental regulations Legal 97% of the raw material produced in china were copied drugs from US Since 1 January 1993, the government exercised patent law protection

16. SWOT

17. Non-Equity modes Equity (FDI) modes Greenfield investments Minority JVsDirect exports Licensing/ franchising Acquisition50/50 JVsIndirect exportsTurnkey projectsOthersMajority JVsOthersContracted R&D Wholly owned subsidiaries Alliances and joint ventures (JVs) Exports Contractual agreements Co-Marketing Strategic alliances (within dotted areas) Choice of Entry

18. Porter Diamond Model

19. Type of Manufacturers ProductsNumber% Chemical drugs148345.5 Traditional Chinese Medicine94629.0 Medical apparatus57017.5 Other medical materials2588.0 Total3257100  Almost 50% of the Pharmacy company’s were of new drugs indigenously produced in china  Rest all of the manufacturers contributed for 50% of manufacturer’s

20. Growth in Production of Raw Materials YearOutput(ton) 19803964.5 1985147832.8 1990209300.0  Double digit growth from in five years of 85-90

21. Distribution and sales %age Contribution Direct sale by pharmaceutical manufacturers; 25 State-owned nationwide sales network; and 50 Specialized medication wholesalers and retailers. 25

22. Foreign-funded Pharmaceutical Joint Ventures in China (by the end of 1993) TypeNumber% Chemical drugs 47538.2 TCM & Nutraceuticals 32426.2 Medical equipment & devices 23418.8 Health care consumables 1129.0 Biological & chemical agents 675.4 Packaging machinery & materials 302.4 Total 1242100

23. Total Export & Import Volume (in US $ million) YearTotalGrowth(%) 1980660.36 1985971.4147.1 19901605.2865.3 19924796.81198.8

24. Market growth  Increasing demand  High priority in the government's modernization plan  Encouragement of foreign investment

25. Effects of policy changes in the industry  Effects of the new patent regulations  GMP (Good Manufacturing Procedures) Standard  Effect of the reform of the public health system  Policies on foreign capital and technology

26. Conclusion With all the analysis of PESTEL & Porter Diamond Model, we conclude that Ranbaxy should enter China.

27. Thanks