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Strategic Implementation & control Project Report on organizational structure and strategies adopted by prominent players in Indian pharmaceutical industry
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Indian Pharmaceutical IndustryOrganisation Structure & Strategies
Submitted By: Group 6
Organisation Structure Overview: Industry practices
• Dimensions of organizational structure
• Specialization of activities• Standardization of procedures• Formalization of
documentation
Structuring of Activities
• Centralization of authority• Configuration of role structureConcentratio
n of Authority
Organisation Structure Overview: Industry practices(continued)
• Indian pharmaceutical Industry wide organization structure mostly follows CHANDLER TIME-LINE
t Simple Structure. Centralized. Single Product Line
t+1 Moderate Centralization, Moderate Formalization, Moderate Complexity
t+2High Complexity, Low Centralization, Moderate Formalization
Organisation Structure Evolution: Industry practices
SimpleStructure
FunctionalStructure
MultidivisionalStructure
Sales Growth-Coordination andControl Problems
Sales Growth-Coordination andControl Problems
Efficient implementation of formulated strategy
Efficient implementation of formulated strategy
Portfolio of Companies
Sun Pharmaceutical Industries Limited
Functional Structure (U) form
Sun Pharmaceutical Industries Limited
Sun Pharma follows a Functional Unitary Structure
Structured around a CEO and limited corporate
staff
Activities are grouped together
by common functions.
Each functional unit has different set of duties and responsibilities
Specialization is built into the organizational
structure.
•Optimize Operational Cost
•Vertical Integration
•Differentiation Strategy
•Provides functional clarity
Dr. Reddy’s Laboratories Limited
Strategic Focus
High Quality portfolio :Mix
of limited competition and complex
generics products to significantly
enhance
Service Level excellence: Continued
strong engagement with strategic
customersSteady growing
business : 12-15 new
launches annually with launch-year
Multi-divisional form (M-Form)
Dr. Reddy’s Laboratories Limited
• The company grows through geographical diversification and exploiting synergies among divisions
Monitoring and
comparing performance between divisions
Strategic Planning
Offers high quality
portfolio – easy to manage
because of the various
divisions functioning
Easy to make Strong engagement
with strategic
customers because of separate economic activities
Focus on company’s
overall growth
rather than divisional growth
Lupin Limited
Strategic Focus
Increase in R&D
expenditureand strategic investments
Actively pursue acquisitions inthe American
region
Multi-pronged strategy
to improve its brand image,
increase revenues, and
expand its product and
service portfolio
Strategicalliance Partners
Multi-divisional form (M-Form)
Lupin Limited
•Quasi-autonomous operating divisions
•Organized along Product, brand or geographical lines
•Appropriate for related-diversified businesses
•Having process framework that integrates the entire organization; from strategic support functions like finance, human resources, regulatory affairs to core operations and delivery units like global procurement, research, manufacturing and supply chain.
•Key task of corporate managers is exploiting synergies among divisions
•Managers use a combination of strategic controls and financial controls
•Enables Monitoring performance, Awarding incentives, Allocate cash flows to high yield uses, Perform strategic planning
Ranbaxy Laboratories Limited
Strategic Focus
Outward investment as a strategy to
become a global player
Contract manufacturin
g,licensing and collaborative
research
Strategic Synergies :Daiichi Sankyo Partnership.
Innovator and Generic
Pharmaceutical
Powerhouse
Multi-divisional: Cooperative M form
Ranbaxy Laboratories Limited
Structural Integration
devices create tight
links among all divisions
Corporate office
emphasizes centralized strategic planning,
human resources, and marketing to
foster cooperation
between divisions
Rewards are subjective and
tend to emphasize
overall corporate
performance in addition to
divisional performance
R & D is centralized
activity.Culture
emphasizes cooperative
sharing
Cooperative M form
AdvantagesUses objective market/output performance measures, bureaucratic controls, and clan/cultural controlsEncourages the
exploiting of economies of scope across divisions
Frees corporate to focus on strategic concerns
Facilitates diversification and growth
References
1. http://www.ranbaxy.com
2. http://www.drreddys.com
3. http://www.lupinworld.com
4. http://www.sunpharma.com
5. http://indiaratings.co.in/upload/research/specialReports/2013/1/29/fitch29Pharmac.pdf
6. http://www.cii.in
7. http://www.mckinsey.com
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