Eli and Lilly
Jianeng Sun (ID:11720021)
BUS 581
Dr. Locker
July 2013
1. Was the country wrong? Why India? The country was right. Even though India was characterized by low per capita GDP, but the population of India cannot be ignored. And 200 million and 300 million of 800 million people in India were middle class. That was a huge potential market for Eli Lilly and Company. As the cost of health-care increased in developed countries in the 1990s, chose India was a good choice for a international company like Eli and Lilly. Especially could uses India as trade route to export products to Russia, so choose India had a lot of advantages. 2. Was deciding to partner wrong? Is partnership a good or bad thing? It was not wrong to be a partner with Ranbaxy. Ranbaxy was the leading domestic pharmaceutical firm in India. And based on the government of India began the process of liberalization and the increase of foreign ownership, the best way for Eli and Lilly was to be a partner of a local pharmaceutical firm. In this case, the partnership is a good thing for both Ranbaxy and Eli and Lilly. 3. Was the partner choice wrong? The partnership with Ranbaxy was the right choice for Eli and Lilly, because Ranbaxy was the leading firm in this industry, and was able to help Eli and Lilly to establish an distribution system. Otherwise, Ranbaxy and Eli and Lilly were both research-oriented and international firms, and Ranbaxy adopted Lilly’s “Red Book” entirely. And later on, these two companies began to enter the generics, which was more profitable. 4. Was the JV structure wrong? The joint venture structure was not wrong. Lilly and Ranbaxy both have 50 percent ownership was good for both of them. And Lilly retained the right to appoint the CEO was also good for the JV to operate like a international company because the brand value of Lilly and the management experience of Lilly. And in this case, we can see clearly from the financial
BUS 581
Dr. Locker
July 2013
1. Was the country wrong? Why India? The country was right. Even though India was characterized by low per capita GDP, but the population of India cannot be ignored. And 200 million and 300 million of 800 million people in India were middle class. That was a huge potential market for Eli Lilly and Company. As the cost of health-care increased in developed countries in the 1990s, chose India was a good choice for a international company like Eli and Lilly. Especially could uses India as trade route to export products to Russia, so choose India had a lot of advantages. 2. Was deciding to partner wrong? Is partnership a good or bad thing? It was not wrong to be a partner with Ranbaxy. Ranbaxy was the leading domestic pharmaceutical firm in India. And based on the government of India began the process of liberalization and the increase of foreign ownership, the best way for Eli and Lilly was to be a partner of a local pharmaceutical firm. In this case, the partnership is a good thing for both Ranbaxy and Eli and Lilly. 3. Was the partner choice wrong? The partnership with Ranbaxy was the right choice for Eli and Lilly, because Ranbaxy was the leading firm in this industry, and was able to help Eli and Lilly to establish an distribution system. Otherwise, Ranbaxy and Eli and Lilly were both research-oriented and international firms, and Ranbaxy adopted Lilly’s “Red Book” entirely. And later on, these two companies began to enter the generics, which was more profitable. 4. Was the JV structure wrong? The joint venture structure was not wrong. Lilly and Ranbaxy both have 50 percent ownership was good for both of them. And Lilly retained the right to appoint the CEO was also good for the JV to operate like a international company because the brand value of Lilly and the management experience of Lilly. And in this case, we can see clearly from the financial