The Indian pharmaceutical

leader

ESSEC – MS SMIB 2011 – Innovation Management– RIVIERE Guillaume, RAKOTOZAFY Bruno

ESSEC – MS SMIB 2011 - INNOVATION MANAGEMENT – RIVIERE Guillaume, RAKOTOZAFY Bruno

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WHAT IS RANBAXY ?

Presence in 23 of the top 25 pharmaceutical markets of the world

India's largest pharmaceutical company :

Global footprint in 46 countries

World-class manufacturing facilities in 7 countries

Serves customers in over 125 countries.

v

ESSEC – MS SMIB 2011 - INNOVATION MANAGEMENT – RIVIERE Guillaume, RAKOTOZAFY Bruno

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RANBAXY’S HISTORY

•Internationalisation of the company :

•Aquisition of « eastern » companies

•Introduction in US market

• Global development of activities

•Continuees expansion with internal and external growth

•« Best Company 2003 » by Times for Corporate excellence

•Recognition as a major pharmaceutical actor

ESSEC – MS SMIB 2011 - INNOVATION MANAGEMENT – RIVIERE Guillaume, RAKOTOZAFY Bruno

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Innovation in making drugs: Generical vs. Blockbusters

ESSEC – MS SMIB 2011 - INNOVATION MANAGEMENT – RIVIERE Guillaume, RAKOTOZAFY Bruno

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The added value triangle

•The combination of these 3 factors created a strategic advantage.

•In a globalizing world, Ranbaxy rised as a local manufacturer for foreign big pharmas and then wanted to develop own drugs.

•With cheaper costs, they first reached a good income to invest.

ESSEC – MS SMIB 2011 - INNOVATION MANAGEMENT – RIVIERE Guillaume, RAKOTOZAFY Bruno

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The process to maintain the added value

ESSEC – MS SMIB 2011 - INNOVATION MANAGEMENT – RIVIERE Guillaume, RAKOTOZAFY Bruno

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Two categories of Competitors

• Same geolocalisated companies competing with

prices

• Giants of the generics drugs market that have plants in

cheap countries

•

• Creating their own units of generics

• Creating new drugs with patents

• Competition on new drugs market where Ranbaxy as less

knowledge

Cheap manufacturers Big laboratories

ESSEC – MS SMIB 2011 - INNOVATION MANAGEMENT – RIVIERE Guillaume, RAKOTOZAFY Bruno

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Pressure coming from the globalized industry

•Continuously improve the R&D effort•Sold its first own innovative product in 2012 (in phase II up to day)•Deal with a mix of low an high end products

•2005: patent recognition in India•China and malaysia are becoming better in drug mass production•Sandoz an Teva are largely more active in Western countries market

•Ranbaxy is present in numerous country but hardly as a leader•External growth vs. Marketshare increase

Negative image of a generical company

Competition from other countries

Dispersion threat

ESSEC – MS SMIB 2011 - INNOVATION MANAGEMENT – RIVIERE Guillaume, RAKOTOZAFY Bruno

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Recommendations

ESSEC – MS SMIB 2011 - INNOVATION MANAGEMENT – RIVIERE Guillaume, RAKOTOZAFY Bruno

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To conclude

The phamaceutical industry is basically one of the most innovative one. Contrary to conventional big pharma Ranbaxy has initially growth thanks to its ability to create very good and cheap drugs. This strategy has lead it to be, in 2010, the most innovative company in India (100 USD million in R&D).The money earned have to be spend now in order to become a real challenger (and surely a leader in some countries) against western companies by creating real new drugs.Thanks to its presence in both academic and industrial network, plus the competence of its management team (fresh CEO Malvinder Singh) the company sould not miss the turn.