InstituteiofiManagement,

NirmaiUniversity

MBAi(FB&E)i2020-22iBatch
INDUSTRYiORIENTATION

Submittediby:

HARSHiVIPULiSUDi(204124)

SubmittediTo:

DR.iRAJESHiJAIN

1i|iPage
 PARTiA:iINDUSTRYiANALYSIS

Thisireporticonsistsiaibriefisynopsisiaboutitheikeyipointsitoibeicoverediunderithisiassignmentitoibriefly
ihelpitheireaderiunderstanditheibasisiofitheiPharmaceuticaliindustry.

iTheiobjectiveiofithisireportiisitoihighlightitheisummaryiofitheitopicsithatiwouldisumiupitheiindustryia
nalysisireport.i

IndustryiClassification:iVariousiPharmaicompaniesispecializeiinicertainitypeiofipharmaceuticaliactiviti
es.iSinceitheivariedinumberiofipharmaceuticalicomplexitiesiexist,ivariousiformsiofimedicinesiwithidiff
erentiformsiofiresearch,idrug,iadministrationipatterniexist.iBroadlyitheiactivitiesiperformedibyiaiPharm
aicompanyiareiasifollows:

• Mainline:iTheseiareitheilargeridrugicompaniesithatihaveiseveralidifferentidrugsitoitheirinam
e.iMoreover,itheseiestablishedicompanies,ilikeiPfizer,ihaveithousandsiofiresearchersiworkin
giforithem,iandiseveralimanufacturingiplants.

• ResearchiandiDevelopment:iTheseiareismalleriresearchiorganisationsiandipharmaibusinesses
ithatifocusioniR&D.iAdditionally,iwhileitheyidoinotihaveidrugsionitheimarket,itheyihelpibig
gerifirmsiwithiclinicalitrialiobservationiasisubcontractorsionilargeriprojects.

• iGeneric:iSinceitheiexpiryiofidrugipatentsihelpiiniloweringitheicostiofimanufacture,igenerici
drugicompaniesihelpimass-
produceidrugs.iMoreover,itheseipharmaceuticalicompaniesidoinotiworkimuchioniR&Dibutih
elpibringipatent-expiredimedicinesitoitheimarketiatilowericosts.

• AIiManufacturers:iTheseicorporationsiproduceibulkicompounds,ibiomoleculesiandiotheriAIs
iforidrugimanufacturers.iFurther,itheyialsoihelpitoicreateivaccines,iserums,iandiotheriproduc
ts.

IndustryiStructure:i

2i|iPage
TheiPharmaceuticaliindustryiisimajorlyicomprisediofitheiorganised,iunorganisedianditheidecentralisedi
sector.i
GeneralinatureiofiCompetitions:iThisitypeiofiindustryiisihighlyipriceisensitiveiandihence,itheicutithroat
icompetitioniplaysiaimajorirole.i
PESTELiAnalysis:iAsitheinameisuggests,ithisianalysisicoversiPolitical,iEconomical,iSocial,iTechnolog
ical,iEnvironmentaliandiLegalifactorsithatirevolveiarounditheibusiness.iTheidataiavailableifromitheisou
rcesisuggestithatitheseiexternalifactorsiplayiaimajoriroleiinidrivingitheiindustry.i
AttractivenessiofiIndustry:iPharmaceuticaliSet-
upirequiresihighiCapitaliinvestmentiandiisihighlyiregulatediasithisiisianiessentialigoodsiindustry.iTheiR
&Diinvolvediisitoibeibackediwithirealiworldidataiwhichirequiresilargeiscaleiacceptabilityiandiconfiden
ce.iHence,iyearsiofiexpertiseibackedibyiinstrumentaliandihumaniresourceiisirequirediforiaisuccessfulise
t-up.
OpportunitiesiandiThreats:iTheiopportunitiesiforithisiindustryicanibeirecognizediasitheievolutioniofitec
hnicaliproducts,ibrandidevelopment,idiversification.iContraryitoithis,itheithreatsicanibeiidentifiediasithe
iveryinatureiofitheiBusiness,iwhichiisihighlyidrivenibyiproductidevelopment.

AilargeiamountiofifundsigoiintoitheiR&Diprocessiwhichiisinecessaryiforitheiproductitoibeisuccessfulii
nsteadiofiotheribusinessipracticesisuchiasimarketingietc.

INDUSTRYiSTRUCTURE

• PharmaiindustryiisioneitheibiggestiindustryiinitheidigitaliageiiniIndianimarket.iIticomprisesiofi
manyisegmentsithatitheicompaniesiinithisiindustryicanistartitheibusinessifor.iTheisegmentsiare:i

1. Merchandising:i-
iTheimerchandisingihasireportedilargestisalesiofitheiproduct.iPharmaiplatformsisellsiailarg
eiamountiofimerchandisingiproductiwhichiareibasicallyipromotionaliitems.iTheionlineiplat
formigivesiaccessitoitheicustomeritoipurchaseitheseiproducts.
i
2. OnlineiMode:i-
iTheionlineiisitheiwebsite/portalimodeithatiisiusediforisellingitheiproductsionline.iItiisithei
mosticommoniwayinowadaysitoibuildiaiportalioriaiwebsiteitoisellitheiproductionline.iInithi
simodeideliveryiservicesiplayiaivitaliroleiasisellingiairealiproductivirtuallyineedsiaistrongil
ogisticsiforiwarehousingiandidelivery.i

3. MainstreamiMarket:i-
iBigicompaniesiinitheiPharmaiindustryitenditoisellifullirangeiofiitemsionitheiriportal.iFrom
,ielectronicsitoielectrical,ifromistationaryitoiofficeisupplies,ifromiclothimaterialitoibranded
iclothes,iallitheithingsiareibeingisoldiinitheiplatform.iCompaniesilikeiCiplaiandiSuniPharm
aiareitheiexampleiforitheimainstreamimarket.iTheyifocusioniallitheiproductiandinotionlyiai
singleisegment.

3i|iPage
 4. R&Di:i-
iTheiPharmaiindustryineedsiregulariandicontinuousiinnovationiwhichiisisupportediwithires
ults.iAilargeiamountiofimonetaryiresourcesigoiintoitheiupdationiofinewigenerationidrugsi
whichihaveienoughiefficacyitoigiveiaiphysiologicalieffect.

GENERALiNATUREiOFiCOMPETITIONi

• Theiframeworkiofigeneralinatureioficompetitioniconsistsiofi5icomponents,itheyiareicompetitors
,ipotentialicompetitors,isubstituteiproducts,icustomers,iandisuppliers.iNow,iweiwilliseeialliofith

eseicomponentsiinidetail

1. Competitorsi&iPotentialiCompetitors:i-
iBeforeitheiriseiofiPharmaiindustryiinitheiIndianimarket,itheiIndianisystemiofimedicineido
minateditheidistributionichanneliasitheyiwereitheilinkibetweenitheicustomerianditheicomp
any.iTheibusinessesiwouldiprovideibenefitsiandiincentivesitoitheiretailersitoisellitheiriprod
uct.iTheicompetitioniwithiniindustryiisiimmense,ibutitheicompetitionioutsideitheiindustryii
simuchilessiasipeopleiareimoreifocusingionitheiservicesibeingiprovideditoithem.iTheicomp
etitorsiwithinitheiindustryiareiofidifferentisize.iTheicompetitioniisihighiwithinieachiofithei

4i|iPage
categoryiandiclassification.iThisiisitheicompetitioniwhichiareiestablishedifirms.iNow,iwei
williseeithatihowithisicompetitioniresistsitheientryiofitheinewientrant.iTheientryitoibarrierii
nithisiindustryiisitheirulesiandiregulationsiimposedibyitheigovernmentiforitheipurposeiofic
yberisecurity.iInternetiisiproneitoicounterfeitingianditoicurbithatirulesiandiregulationsilikei
theiGMPicertifiedicompanies,ifacilities,iqualifiediprofessionalsietc.iOtheribarrieriisitheicos
tiadvantageitoitheiexistingiplayersioritheifirmiinitheimarket.iBigicompaniesihaveitheiadvan
tageiofifirstimoverianditheicapitaliinvestmentiitihasimadeienablesitheicompanyitoiofferithe
iproductsiatiaireasonableipriceithenitheinewientrantiwhoihasimuchilessiresourcesiavailable
iwithithemiandilackiofiworkingicapital.iEconomiesiofiscaleialsoimatteritheimostiasitheiind
ustryineedsitoibeianalysediatiaiglobalilevel.iTheinewientrantsihaveitoienteritheimarketiwit
histrongiresourcesiandicapitalitoibeatitheicompetitioniposedibyitheiexistingifirms.i

5i|iPage
2. Brandedi/iGenericiproduct:i-
iTheidifferenceibetweenibrandinameiandigenericidrugsiisiinitheicircumstancesiofiproducin
githeidrugs.iWhileibrandinameidrugirefersitoitheinameigivingibyitheiproducingicompany,i
genericidrugirefersitoiaidrugiproducediafteritheiactiveiingredientiofitheibrandinameidrug.i
Genericidrugsiwill,ihowever,ibeisoldiunderidifferentibrandinames,ibutiwillicontainitheisam
eiactiveiingredientsiasitheibrand-
nameidrug.iButiwithiregardsitoitheieffectivenessiofitheidrugs,igenericidrugsihaveitheisame
iqualityiactiveiingredientiasibrandinameidrugs.iAllidrugsimusticomplyiwithistrictidirectivei
andisupervisioniofitheiFoodiandiDrugiAdministrationi(FDA)iinitheiUSiandiequivalentiinst
itutionsiiniothericountries.Foribrandingipurposes,igenericidrugsiareinotiexactlyitheisameiin
ilook,icolor,itastesiandishapeiasitheibrandinameidrugsiandimustihaveiitsiuniqueibrandinam
e.Theseiareasiofidifferencesiareinoticeableibetweenibrandinameiandigenericidrugsiandiam
ongigenericidrugsiasiwell.iItimeansiyouiwilligetidifferentidrugsinamesiwithitheisameiactiv

eiingredients,iandithisiactiveiingredientiisiwhatirefersitoitheigenericidrug.i

3. CustomeriPower:i-
iTheibargainingipoweriofitheicustomeriincreasesiwhenithereiareimanyicompetitorsiinithei
marketiforiaisameiproduct.iCustomersicanishiftitheirisupplieripreferenceiwheneveritheyine
ed.iWeicanianalyseiitilookingiatitheiindustry.iForieveryiproductisoldionline,ithereiareifewi
portalsithatiareiavailableiforisellingitheiproducts.iSo,imany-a-
timesiitihappensithatibuyeridoesinotigetitoibargainitheiamountiatiwhichitheyiwantitoipurch
ase.iTheiamountiisifixatediandiisinon-
negotiable.iTheibargainingipoweriofitheicustomerialsoidependsionitheibuyeriswitchingicos
t.iAsitheiswitchingicostiincreases,itheibargainingipoweritheibuyeridecreasesiasitheyiwillin
otibeiableitoigetitheiproductiwhatitheyiwantifromidifferentisellersiandidifferentisources.iOr

6i|iPage
 ionlyiifitheyigetiit,itheiswitchingicostiinitermsioficapitaliandiqualityiwilliaffectitheiribargai
ningipower.iIfitheibuyeriofitheiproductiisilargeienoughiinitermsiofisalesiofiaicompany,ithe
nitheibargainingipoweriofitheibuyeriincreases.
4. SupplieriPower:i-
iTheibargainingipoweriofitheisupplieriisitheipowerithatitheisupplierihasitoidictateitheiterm
siofitheitradeibetweenitheisupplierianditheibuyer.iAsitheisupplieriinitheimarketidecreasesit
hanitheibuyersiinitheimarket,ithenitheibargainingipoweriofitheisupplieriincreases.iInitheiPh
armaiindustryiasitheisupplieriofitheiproductsisoldionionlineiportalsiareiless,itheipoweriofit
heisupplieriinideterminingitheitermsiforisellingitheiproductiisidominantionitheibuyersiinith
eimarket.iThereiareimanyiproductsiavailableiinitheiwebsiteiorionitheiportals,ibuticompared
itoitheiseller,itheiportalsiareilessiininumber.iAnyipersoniwhoihasisomeiproductitoisellicani
approachitheicompanyioperatingiportalitoiplaceitheiriproductionidisplayionitheiriwebsite.

PESTELiANALYSIS

• TheiPESTELianalysisiisitheianalysisiofitheimacroienvironment.iHere,itheianalysisiisiforitheiPh
armaiindustryianditheiimpactionitheiindustryidueitoifactorsiofitheimacroienvironment.iTheifact
orsiofitheimacroienvironmentiareipolitical,ieconomic,isocio-
cultural,itechnological,ienvironmental,iandilegal.iTheidetailedianalysisiisiasifollows:i

7i|iPage
Political

Thereiisinowigrowingipoliticalifocusiandipressureionihealthcareiauthoritiesiacrossitheiworld.iThisimea
nsithatigovernmentsiwillibeilookingiforisavingsiacrossitheiboard.

GovernmentiFramework

Allicountriesihaveiaicertainiframeworkiregardingitheipharmaceuticaliindustry.iThisiincludesisafetyistan
dards,icertifications,iandidrug-
relatedilaws.iWhileiinimanyicountriesitheseilawsiareinotisoistrict,iininotisoidevelopedicountriesitheyiar
eiquiteiharshiandidoinotiallowitheipharmaceuticaliindustryitoiprogress.

ClosediMarket

8i|iPage
Theipharmaceuticaliindustryiconsistsiofivariousilargeicorporations.iAnditheiglobalileveliofitheiridistrib
utioniandimarketingialongiwithitheiregulatoryiframeworkimakesiitidifficultiforinewcomersitoienterithei
market.iThisishowsistricticompetitioniwithinitheimarketiasiwelliasiprovidesiailargeriindustryipersonaisi
nceimostiofitheibrandsiareiestablished.

PriceiControl

ManyicountriesialongiwithitheiUnitediStatesiareicreatingilawsithatiplaceistricticontrolionipricingiofidru
gs.iThisihasicausedihindranceitoitheigrowthiofitheiindustry.iHowever,ithereiareialsoipopulistidemandsi
oficheaperidrugsiforilowericlassesiofisociety.iManyipharmaceuticalicompaniesiareifacingimajorilosses,i
andifurtherifalliinipricesimayiforceithemitoiquit.

Economic

Theiglobalieconomicicrisisistilliexistsiyetigovernmentireportsistillishowithatitheispendionihealthcareipe
ricapitalicontinuesitoigrow.iWillitheicurrentihealthcareimodelsiexistitomorrow?iTheigrowthiinihome-
carei(asiseeniinitheiNutritionisector)idemonstratesihowinursingiservicesihaveimoveditoitheiprivateisect
oriandihaveibecomeiaikeyibusinessioffering.
Theireductioniiniconsumeridisposableiincomeiwillihaveianiimpactionithoseicountriesiusingihealthiinsur
anceimodelsiparticularlyiwhereipartipaymentiisirequired.
Theseieconomicipressuresiareiseeingianiincreasedigrowthiinistrategicibuyingigroupsiwhoiareiforcingid
owniprices.
Increasedipressureifromishareholdersihasicausediaiconsolidationiofitheiindustry:imoreimergersiandiacq
uisitionsiwillitakeiplaceioveritheicomingiyears.

GrowthiiniIndividualiIncome
Theigeneralitrendiofihouseholdispendingiisidefinitelyiincreasingianditheyispendiailargeipartiofiititowar
dsitheipharmaceuticaliindustry.iPurchaseiofidrugsihasibecomeimoreicommonithanieveriandioneiofithei
primaryicausesiisithatipeopleicaninowiownidrugsithatiwereipreviouslyiofiaihighiprice.

NewiDrugs

SinceiR&Diisiatianiall-
timeihighithanksitoitheitremendousigrowthiinitechnology,imanyinewidrugsiareibeingiintroducediintoith
eimarket.iAsiairesultiofithisipeopleiareipurchasingitheseidrugsiandiprovidingifurtherigrowthitoitheiindu
stry.iWeiexpectitheireleaseiofimoreisuchidrugsiinitheinearifuture.

Cost-Cutting

Asitheidrugipricesiareislashedibyigovernmentaliregulations,ipharmaceuticalicompaniesiareihavingitoicu
tidownionitheiriproductionicost.iThisiisiaimajoridowntrendiforitheiconditioniofitheipharmaceuticaliindu
stry.iHowever,iitiisiexpectedithatitheiglobalieconomyiwilliflourishiinitheicomingidecadeiallowingithese
icompaniesitoiexpandianditakeibackitheimarket.

Sociali/iCulture

Theiincreasingiagingipopulationioffersiairangeiofiopportunitiesiandithreatsitoitheipharmaceuticaliindust
ry.iTheitrickiwillibeitoicapitaliseionitheiopportunities.

9i|iPage
Thereiisialsoitheiproblemiofitheiincreasingiobesityiamongstitheipopulationiandiitsiassociatedihealthiris
ks.

GenerationiHealth

Theicurrentipopulationifeaturesipeopleiofiolderigenerationiiniailargeinumber.iThisimeansitheinumberio
fisickipeopleiisihigherithaniever.iThisihasiplacediaihighiamountiofipressureionitheipharmaceuticaliindu
stryileadingitoiitsigrowth.iHowever,iwhenithisiparticularigenerationipassesiawayithereiisiexpecteditoibe
iaidownfalliinitheidemandiofivariousidrugs.
GlobaliObesity

Obesityiisiailargerifactorithanieveribefore.iTheilastifewidecadesiwitnessedirapidichangesiinitheiglobali
dietistyle,iandithisihasileditoiobesityiiniailargeipartiofitheipopulation.iInimostidevelopedicountriesiobes
ityiisialmostianiepidemic,iandithisiwillisoonibeitheiconditioniinidevelopingicountriesiasiwell.iTheirapid
igrowthiiniobesityiratesihasileditoitheirequirementiforimanyidrugsiandiallowedithoseiparticularisectorsi
ofitheipharmaceuticaliindustryitoigrow.

HealthiConsciousness

Monitoringione’siownihealthihasibecomeiaitrendiofitheicurrentigeneration.iWhileithisimayileaditoilesse
rirequirementiofidoctorsiandigeneraliphysicians,ipeopleiareinowiconsumingimoreidrugsithaniever.iHow
ever,iexercisingiandifitnessitrendsiareialsoileadingitoilesserirequirementiforidrugsiasitheyileaditoihealth
ierilifestyleiwithoutitheineediforidrugs.

Technological

Technologicaliadvancementsiwillicreateinewibusinessiprospectsibothiinitermsiofinewitherapyisystemsi
andiserviceiprovisions.iTheionlineiopportunitiesiwilliseeitheigrowthiin:

• NewiinfoiandiCommunicationsitechnologies.
• SocialiMediaiforiHealthcare.
• CustomisediTreatments.
• DirectitoiPatientiAdvertising.
• Directitoipatienticommunications.

GrowthiinitheiBiotechiIndustry

Biotechnologyiallowsitheidecodingiofianimaliandiplantiaspectsitoihelpihumanitarianicauses.iItihasiailar
geipartitoiplayiinitheicreationiofidrugsianditheicurrentigrowthiinithisiindustryiisiproducingimanyinewi
medicinesiandialsoidevelopinginewimethodsitoimakeicheaperialternatives.iThereiareihighiexpectationsi
fromitheibiotechiindustryitoigrowievenifurtheriandiconstantlyifuelitheigrowthiofitheipharmaceuticaliind
ustry.

MarketiReach
Marketingihasicomeiailongiwayifromiitsiorigins.iNowipharmaceuticalicompaniesiareiableitoimarketithe
iriproductsidirectlyitoitheiconsumers.iThisihasileditoiconsumersipurchasingimoreidrugsiandicreatingide
mandiforimoreiconsumeridrugs.

Legislation

10i|iPage
Theipharmaceuticaliindustryihasimanyiregulatoryiandilegislativeirestrictions.iThereiisialsoiaigrowingic
ultureiofilitigationiinimanyicountries.iTheievolutioniofitheiinternetiisialsoistretchingitheilegislativeibou
ndariesiwithipatient’sidemandingimoreirightsiinitheirihealthcareiprogrammes.

StrongiLegislation

Fraudsiinitheihealthcareiandipharmaceuticalisectoriisiquiteicommon.iThisiisiwhyimostigovernmentsiha
veiplacedistrictilawsithatiaudititheigrowthiofitheseicompanies.iAsiairesult,ipharmaceuticalicompaniesih
aveitoibeicarefulitoimeetiallitheigovernmentalirequirementsiwhileioperating.

Cybersecurity

Pharmaceuticalicompaniesiareinowilargelyidata-
based.iHence,itheyineeditoiensureiprotectionifromicyberithreats.iIfiaicompanyiisiopenitoicyberithreatsit
heiricustomersimightinotitrustitheiriproductsiandiservices.

Environmental

Thereiisiaigrowingienvironmentaliagendaianditheikeyistakeiholdersiareinowibecomingimoreiawareiofit
heineediforibusinessesitoibeimoreiproactiveiinithisifield.iPharmaicompaniesineeditoiseeihowitheiribusi
nessiandimarketingiplansilinkiiniwithitheienvironmentaliissues.iThereiisialsoianiopportunityitoiincorpo
rateiitiwithinitheiriCorporateiSocialiResponsibilityiprogrammes.iMarketingiandinewiproductidevelopm
entishouldiidentifyiecoiopportunitiesitoipromoteiasiwell.WeihaveijustianalysediallitheiaspectsiofitheiPE
STELianalysisithatitheicompanyiinitheiindustryishouldidoibeforeienteringitheiindustryianditheiIndiani
market.i

CarboniFootprint

Manufacturingidrugsileaveiailargeicarbonifootprint.iAndiwithitheicurrentienvironmentaliconcerns,ide
mandsiforiregulationiofipharmaceuticaliwasteihasibecomeiaimajoriconcerniforitheseicompanies.iMostio
fithemiareilargeibusinessesiandiareiexpecteditoimeetihighlyistipulatedienvironmentaliregulations.

Investments

Alongsideiregulatingitheiriownicarbonifootprintitheseicompaniesioftenitakeipartiinidonatingiforienviro
nmentalicauses.iAsiairesult,itheinewcomersiareialsoiexpecteditoitakeipartiinisuchiactivities,iandithisima
kesitheimarketimoreistringent.

ANALYSISiOFiTHEiATTRACTIVENESSiOFiTHEiPHARMACEUTICALiINDU
STRY

Thereiareidifferentiphasesiduringitheidevelopmentiofianiindustry.iEveryiphasesiisicharacterisedibyiaidi
fferentienvironmentsiwhichimakeicompetitioniassumesidifferentitheiform.iThroughistudyingitheilifeicy
cle,itheiindustryirealisesiitsistakeiinitheimarketiandiitsiinfluenceioniconsumers.iTheiindustryilifeicyclei
modeliincludesifouridifferentiphases:iintroduction,igrowth,imaturityiandidecline.
Theifirstiphase,icallediintroduction,iisicharacterisedibyiailowidemand,iwhereasipricesiareihighiasiaicon
sequenceiofifirm’siinabilityitoirealiseieconomiesiofiscale.iForithisireasoniprofitsiareilowiandilossesiarei
possibleidueitoihighiamountiofiinvestmentsiininewicategories.iBarriersitoientryiareiprimaryibasedionite

11i|iPage
chnologiesiandicompetencies.iStrategyiisifocusedimainlyioniR&Diandiproduction,iwithitheigoaliofienh
ancinginoveltyiandiquality.iCompetitors,iattractedibyitheirisingidemand,iattemptitoireplicateitheinewipr
oduct.
Initheisecondiphase,igrowth,itheiuseiofitheiproductiisiextended,idemandigrows,ipricesideclineidueitoiec
onomiesiofiscale,ibarriersitoientryiareilowerianditheithreatiofinewientryiisihigh.iAtithisiphaseitheitechn
ologyiisiusuallyinotiexclusiveipropertyiofioneiorimoreifirms,ianditheiprimaryireactionitoicompetitioniis
imarketingiexpenditureiandiinitiatives;iprofitsiareinotiveryihighibecauseipricesideclineiasicompetitorsie
nteritheimarket.iThereiisiaitransitioniperiod,iorishakeout,ibetweenitheisecondianditheithirdiphases.iThei
shakeoutiinvolvesifindingiandiusingialliinvestmentiopportunities,ibecauseitheimarketiisinearisaturationi
andidemandigrowsimoreislowly.
Initheithirdiphase,imaturity,imarketigrowthiisilowiorinonexistent,ianditheifocusishiftsitoigainingimarket
ishare;idemandiisirepresentedionlyibyitheisubstitutioniofiproducts,iinvestmentiiniR&Didecreasesiandith
ereiisilittleiinnovation.iInithisiphaseifirmsiseekicostireductions,iandicompetitioniisibasediprimarilyionia
dvertisingiandiqualityibecauseiofitheilowidifferentiationibetweeniproducts.iBigifirmsiacquireismalleripl
ayers,iwhileiothersiareiforceditoiexit.iAsiaiconsequenceiofihighibarrieritoientry,itheithreatiofinewientra
ntsiareilow.
Theilastiphaseiisidecline,isoicalledibecauseiofitheicontinuedideclineiinidemand.iIndustriesiarriveiatithis
istageiforiaivarietyiofireasons.iTheseiincludeiaichangeiinisocialibehaviours,idemographicichanges,iinter
nationalicompetition,itechnologicaliinnovationsiandiincreasedicustomeriknowledge.iTheibuyingiproces
siisibasediprimarilyionipriceiratherithaniinnovation.iAsiairesult,iprofitiandirevenuesidecline,ianditheiin
dustryiasiaiwholeimayibeisupplanted.

Theifirsticompetitiveiforce,ithreatiofientry,irefersitoitheithreatiofinewientrantsiinianiestablishediindustr
yioriacquisitionitoigainimarketishare.iReactionsiofiparticipantsiandibarriersitoientryiareitheimainifactor
siuseditoiestablishiwhetheritheithreatiisihighiorilow.iSiximajorientryibarriersihaveibeeniidentified:

• Capitalirequireditoicompeteiinitheiindustryi(especiallyiiniriskyiindustry,isuchiasiadvertisingiori
R&D)
• Switchingicosts
• Accessitoidistributionichannels
• Economiesiofiscale
• Costidisadvantagesiindependentiofiscale,isuchiasipatents,iaccessitoiknow-
how,iaccessitoilimitediresources,ifavorableilocations,igovernmentisubsidiesioripoliciesiandilear
ningioriexperienceicurves
• Productidifferentiation
• Expectediretaliationifromiexistingifirmsiagainstitheinewientrants

Strongibarriersitoitheientryiofinewifirmsienableiaifewifirmsitoidominateitheimarketianditherebyiinfluen
ceiprices.
Theisecondiforceiisiintensityiofirivalryiamongiexistingicompetitors.iRivalryitakesiplaceiwhenioneiorim
oreifirmsiinsideianiindustryitryitoiimproveitheiripositioniusingitacticsisuchiasipriceicompetition,inewip
roductiintroductioniorinewiservices.iRivalryidependsioniseveralifactors:inumberiandisizeioficompetitor
s,iindustryigrowth,iproducticharacteristicsi(whichidetermineiwhetheritheirivalryiisibasedionipriceioridif
ferentiation),icostistructure,iexitibarriers,idiverseicompetitors,ioperativeicapacityiandihighistrategicistak
es.iIfianiindustryiisiinhibited,ithenifirmsiwilliexperienceidifficultiesiwhenitryingitoiexpand.iTheigrowth
iofiforeignicompetitionianditheicorporateistakesishouldialsoibeiincludediinitheianalysis.

OPPORTUNITYiANDiTHREAT

12i|iPage
• TheiPharmaiindustryihasiitsiowniopportunityiandithreatiandithatiisidiscussediinithisisegmentiofi
theireport.iTheiopportunityiofitheiPharmaiindustryiisiasifollows:
i
• TheiIndianiPharmaiindustryifacesilackiofiresearchicomponentsiandirealitimeigoodimanufac
turingipractices.iThisihasialwaysibeeniaidifficultyiforitheiPharmaiindustry.iPharmaicompan
iesishouldibuiltiinisuchiaiwayithatitheyiareiequippediwithibetterioperationalifacilitiesiandia
bilities.
• IndianiPharmaicompaniesiareinotigettingiproperiprofits,itheiriearningsiareibasicallyiveryilo
wiasicompareditoitheiricounterpartsiiniothericountriesisuchiasitheiUS.iTheiriincomeiisinoti
sufficientienoughitoiinvestimoneyioniresearchicomponent.
• TheiPharmaiindustryiisidependentioniChinaiforitheisupplyiofirawimaterialiforigenericimedi
cinesiproduction.
• Indiaineedsiuserifriendlyigovernmentipolicyiforitheicommonimanitoiestablishismalliscale,ir
awimaterialimanufacturingiunits/iincubatorsiiniallistatesiofitheicountryitoiimproveiavailabil
ityiofirawimaterialsitoimanufactureigenericidrugsiatiaffordableirates.
• Theigovernmentiandiindustryishouldifacilitateitheipharmacisticommunityitoibecomeientrep
reneursiandipromoteiincubatorsi’establishment.
• Rawimaterialiproducedifromismalliscaleiunitsishouldibeiproperlyivalidatediinitheitestingila
boratoryiofitheistateitoiascertainitheiriqualityispecifications.
• Thereiisiaineediforiaifunctionalitestingilaboratoryiinieveryistateitoifastenitheiworkiofispecif
icationiofirawimaterials.
• Smalliscaleiproducesimayibeire-
processediinianotheriindustryioriviaiaichainiofiindustryiforiqualityiproductsithaticanibeiuse
diforiparenteral/tailor-madeiformulations.
• Skilledimanpowerifromiacademiciinstitutionsicanibeiachievedithroughicontinuingieducatio
niprogrammes.

• TheithreatiforitheiPharmaiindustryiare:i

• Researchischemesishouldibeiinitiatedibyitheiindustryiviaidirecticontactiwithiidentifiedirese
archer/faculty.
• Incentivesishouldibeipaiditoistudentsicontributingitowardsidevelopmentiofianyiresearchifor
mulaiforitheiindustry.
• Industryishouldiexploreitheiavailabilityiofiqualifiedistudentsibeyondimetroicities.
• Everyiindustryihasiitsiowniprotocolitoiserveitheisociety.iTherefore,itheipharmaiindustryish
oulditrainistudentsiasiperitheirineed.iOnlyiaifewiindustriesiareithinkingiinithisiline.iIndustri
esishouldicontactiIndianiacademiciinstitutionsitoigetiqualifiedistudentsiwhoihaveitheiknowl
edgeiandiaptitudeiforiresearchiandidevelopmentiinipharma.
• Adoptioniofiuser-
friendlyipoliciesiwillihelpiestablishismalliscaleiindustryiandiencourageistudentsiandimiddle

13i|iPage
 iclassibusinessiownersiwithiambitionsiinithisiline.iThisiwillialsoihelpiovercomeitheiproble
miofiunemploymentiforipharmacistsiandipromoteientrepreneurshipiinitheination.
• Withichangingitimes,istudentsiareigettingiexposureithroughiinternetiaboutiresearch/itechnol
ogyiaroundithem.
• Indianiacademiciinstitutionsiareifulliofiideasibornifromitheiyoung,icreativeibrainsiofistuden
ts.
• Indianipharmaiindustryicaniexploreitheseiideasiforifutureiprogress.
• Thereiareiampleiopportunitiesiforiindustriesitoirepresentitheiridataiviaiacademicipharmaiins
titutions.
• Pharmacyistudentsiareihighlyiqualifiedipersonsiinihandlingiofiinstrumentsiwithihavingigoo
diknowledgeiofidataiinterpretationiandidataimining.iTheiimportantipartiisithatithereiisinoisi
gnificanceiofiinstrumentalidataiwithoutiinterpretation.iTherefore,isuchiknowledgeiofistuden
tsicanibeiexploredibyitheiindustryiatitheicostiofilivingiwedges.

PARTiB:iFIRMiANALYSIS
• TheicompaniesithatiareiidentifiedifromitheiPharmaiindustryiforitheianalysisiare:i
1. SUNiPHARMA
2. DR.iREDDY’Si
3. CIPLA
4. CADILAiHEALTHCARE
5. LUPIN

SUNiPHARMA
GROWTHiANALYSIS
SuniPharmaceuticalsiwasifoundedibyiDilipiShanghviiini1983iiniVapi,iGujarat,iwithifiveiproductsitoitre
atipsychiatryiailments.iCardiologyiproductsiwereiintroducediini1987ifollowedibyigastroenterologyiprod

14i|iPage
uctsiini1989.iTodayiitiisitheilargestichroniciprescriptionicompanyiiniIndiaiandiaimarketileaderiinipsych
iatry,ineurology,icardiology,iorthopedics,iophthalmology,igastroenterologyiandinephrology.
Thei2014iacquisitioniofiRanbaxyimadeiSunitheilargestipharmaicompanyiiniIndia,itheilargestiIndianiPh
armaicompanyiinitheiUS,iandithei5thilargestispecialtyigenericicompanyiglobally.
Overi72%iofiSuniPharmaisalesiareifromimarketsioutsideiIndia,iprimarilyiinitheiUnitediStates.iTheiUSi
isitheisingleilargestimarket,iaccountingiforiabouti50%iofitheicompany'siturnover;iiniall,iformulationsio
rifinishedidosageiforms,iaccountifori93%iofitheiturnover.iManufacturingiisiacrossi26ilocations,iincludi
ngiplantsiinitheiUS,iCanada,iBrazil,iMexicoiandiIsrael.iInitheiUnitediStates,itheicompanyimarketsiailar
geibasketiofigenerics,iwithiaistrongipipelineiawaitingiapprovalifromitheiU.S.iFoodiandiDrugiAdministr
ationi(FDA).
SuniPharmaiwasilistedionitheistockiexchangeiini1994iinianiissueioversubscribedi55itimes.iTheifoundin
gifamilyicontinuesitoiholdiaimajorityistakeiinitheicompany.iTodayiSuniPharmaiisitheisecondilargestian
ditheimostiprofitableipharmaceuticalicompanyiiniIndia,iasiwelliasitheilargestipharmaceuticalicompanyi
byimarketicapitalisationionitheiIndianiexchanges.
TheiIndianipharmaceuticaliindustryihasibecomeitheithird-
largestiproduceriinitheiworldiinitermsiofivolumesiandiisipoiseditoigrowiintoianiindustryiofi$36.7ibillio
nifromi$20ibillioniini2015.iInitermsiofivalueiIndiaistillistandsiatinumberi14iinitheiworld.
Ini2009iSuniPharma'siCaracoiPharmaceutical'siplantiiniDetroitiwasiclosedidueitoiunsanitaryiconditions
iresultingiinitheiseizureiofi$20imillioniofidrugsibyitheiFDAiforicontaminationiissues.
IniDecemberi2016itheiFDAisentiSuniaiwarningiletteriaboutinineiviolationsiatiitsimanufacturingiplantii
niHalol.
SuniPharmairequestediUSFDAitoiwithdrawiapprovalifori28iAbbreviatediNewiDrugiApplicationsi(AN
DAs)ibelongingitoiitsiwhollyiownedisubsidiaryiRanbaxyiLaboratories.

ORGANIZATIONALiCULTURE
• TheigrowthistoryiofitheicompanyiSuniPharmainarratesitheistoryiofitheiorganizationalistructure.i
ItiisioneitheibiggesticompanyiinitheiIndianiPharmaiindustryiandiitiplanningitoigoiglobaliwithial
litheiacquisitionsiandimergersiitihasibeenidoing.iAllitheifundingithatitheyiareiacquiringihelpsith
emireachitheirigoalitoibecomeiIndia’siPharmaiHub.iTheirigoaliisiachievableidueitoiallitheifundi
ngiprovidedibyitheiinvestorsithatiareiinitheiglobalimarket.iTheiproductimixithatinowitheyiofferi
areibeyondianyicompanyithatiareiinitheiIndianiPharmaiindustry.iProductsirangingifromiaigeneri
citabletsitoiMonoclonaliAntibodiesiwhichienablesithemitoitargetiailargeicustomeribaseiinitheim
arket.iTheicompanyihasimarkediairecordibreakingimarkionitheiIndianiPharmaiindustryimarketia
fterireachingiaicommendableimarketishareiinitheiindustry.iThisiisitheilargestimarketishareianyic
ompanyihasiachievediinianyiindustryiiniaishortiperiodiofitime.i

• Thisiallihappenedidueitoitheirimissionianditheiobjectivesitheyihaveisetiforitheiriorganization.iT
heibeliefithatitheyicarryiinitheiorganizationiisitoiprovideidelightfulicustomeriexperience.iTheibe
liefithatitheyiholdihasiaiplaceiinitheimissionistatementiiniwhichitheyibelieveiailot.iTheiobjectiv
esiofitheiorganizationiareicustomerisatisfaction,iownership,iImpact,ihonesty,iselflessnessiandiin
novation.iTheiobjectivesiofitheiorganizationigivesiusiaiglanceiatitheiorganizationistructureitheyi
have.iTheiemployeesiofitheiorganizationibelieveiinitheivaluesiandiobjectives.iThisihelpsithemis
tayifocusediinitheirijobiandimotivateithemitoiperformitowardsigoal.iThisihelpsitheicompanyitoi
enhanceitheirigrowthiandimarketishare.iAsitheiemployeesiworkiatitheirifullipotential,itheioutco
meiresultsiwillibeibetterianditheicustomersiwillibeisatisfiediwhichiiniturniincreasesitheisalesiofi
theicompany.i

7SiFRAMEWORK
• Thei7SiframeworkiforitheicompanyiSuniPharmaiisiasifollows:i

15i|iPage
 1. Strategy:i-
iTheistrategyiappliedibyitheicompanyiSuniPharmaiisitheilowicostiprovideriinitheimarket
.iTheyihaveianalyseditheiIndianimarketianditheiIndianicustomersianditheyihaveisegment
edithemiintoivariousicategories.iCategoriesionitheibasisiofigender,iage,ieducationiandial
soibasedionitheigeography.iIndianipeopleiwantsiproductiatiailoweripriceidoitheyiofferilo
westipriceipossible.i
2. Structure:i-iTheistructureiofitheicompanyiSuniPharmaiisitheitop-
downimanagementistructure.iAtitheitopitheyihaveishareholdersiasidiscussediinitheiearlie
ripart.iAfterithatitheyihaveiboardiofidirectorsiandiCEO.iThenitopimanagementianditheni
middleiandilowerimanagement.iAtitheibottomiofitheihierarchy,itheyihaveideliveryiperso
nsiwhoiareiinicontactiwithitheicustomers.i
3. Systems:i-
iTheisystemiandiworkingiprocessiisisimpleiforiSuniPharma.iAtitheistartitheyiprocureian
dipurchaseitheiproductsiforitheicustomersithatiareitoibeisolditoitheicustomers.iAfterithati
logisticsipartilooksiafteriwarehousingiandideliveryitime.iAfterithatitheyisellitheiproductit
oitheicustomerithroughidifferentilogisticsiassociates.iIfithereiisireturniofitheiparcelithenit
heiproductiisiagainitransporteditoitheiwarehouse.i
4. SharediValue:i-
iTheisharedivaluesiwithinitheiorganisationiofiSuniPharmaiareicustomerisatisfaction,iown
ership,iImpact,ihonesty,iselflessnessiandiinnovation.iTheyiwantitoiinculcateiallitheivalue
siinieachiandieveryiemployeeiinitheiricompanyisoithatitheyicanicreateiaimarketibrandifo
rithemianditheseivaluesiwillihelpithemireachitheirigoals.i
5. Style:i-
iTheistyleiofitheicompanyiisitoiinculcateiallitheivalueitoiconqueritheirimissioniandiobjec
tivesiforiwhichitheyithriveitoiexist.iTheistyleiofitheicompanyiisitoiacquireitheibusinesse
siiniwhichitheyiwantitoiexpand.i
6. Staff:i-
iTheistaffiofitheicompanyiSuniPharmaiareiloyalitoitheiriobjectivesiandicoreivaluesiofith
eicompany.iSuniPharmaihasioveri30,000iemployeesiworkingiforithemianditheigoaliofiea
chiandieveryiemployeeiisitoiachieveimaximumioutcomeiasipossible.i
7. Skills:i-
iSkillsiofitheicompanyiliesiwithitheiriemployeesianditheirialliances.iTheyihaveiskilledie
mployeesiinitermsiofitechnologyianditakingicareiofitheicustomers.iTheyiinnovateieveryi
timeitheyifindisomethinginewiandiactiuponiitiquickly.iTheimarketingiteamiandisalesitea
miareiskilledienoughitoibringitheicompanyi50imillioniactiveiusers.iThisicompanyiworks
ioniskillediemployees.i

COMPETITIVEiPOSITION
➔ TheicompetitiveipositioniofiSuniPharmaiinitheimarketiis:i

1. Threatitoinewientrant:i-
iTheithreatitoinewientrantiisilowiinithisiindustryiforiSuniPharma.iAsitheyihaveiailargei

16i|iPage
 productimixiavailableiwithithemiandihavei60%iofitheimarket’sicustomeribase,itheithrea
tiisilow.
2. Threatiofisubstituteiproducts:i-
iTheithreatiofisubstituteiproductiisimediumiforiSuniPharma.iAsitheisubstituteiproductiisi
socialimediaiandilocaliretailishop,ipeopleitenditoishopionlineidueitoidiscountedipriceian
divariousioffers.i
3. Bargainipowerioficustomer:i-
iBargainipowerioficustomeriisilowiasitheyicanichooseifromitheioffersitheyiareigettingia
nditheyicannotinegotiateitheipriceiwhichiisioffereditoithem.iButiSuniPharmaidoesinotile
aveiaichanceiforitheicustomeritoibargainiasitheyiprovideileasticostipossible.
4. Bargainipoweriofisupplier:i-
iThereiareicertaininormsisetibyiSuniPharmaitoitheisupplieriinitermsiofipricing.iTheibarg
ainipoweriofisupplieriisihigheriwhenitheisupplierisellsibrandediitemsiandionlyitheyicani
provideithatiproduct.iProductsilikeiLevisijeansiareisoldiatitheipriceisetibyitheisupplierian
dinotibyiSuniPharma.
5. Competitors:i-
iTheicompetitioniisihighiiniIndianimarketiasithereiareimanyicompetitorsiwithiSuniPhar
ma.iButiSuniPharmaihasitheicompetitiveiadvantageiasitheyiofferibothigenericiandibrand
edilocaliproducts.

PROBLEMiANALYSIS

17i|iPage
i

i
i

DR.iREDDY
GROWTHiANALYSIS
Dr.iReddy'siLaboratoriesiisianiIndianimultinationalipharmaceuticalicompanyilocatediiniHyderabad,i
Telangana,iIndia.iTheicompanyiwasifoundedibyiAnjiiReddy,iwhoipreviouslyiworkediinitheimentoriinst
ituteiIndianiDrugsiandiPharmaceuticalsiLimited.iDr.iReddy'simanufacturesiandimarketsiaiwideirangeio
fipharmaceuticalsiiniIndiaiandioverseas.iTheicompanyihasioveri190imedications,i60iactiveipharmaceut
icaliingredientsi(APIs)iforidrugimanufacture,idiagnosticikits,icriticalicare,iandibiotechnologyiproducts.
Dr.iReddy'sibeganiasiaisupplieritoiIndianidrugimanufacturers,ibutiitisoonistartediexportingitoiotheriless
-
regulatedimarketsithatihaditheiadvantageiofinotihavingitoispenditimeiandimoneyioniaimanufacturingipl
antithatiwouldigainiapprovalifromiaidrugilicensingibodyisuchiasitheiU.S.iFoodiandiDrugiAdministratio
ni(FDA).iByitheiearlyi1990s,itheiexpandediscaleiandiprofitabilityifromitheseiunregulatedimarketsienab
leditheicompanyitoibeginifocusingionigettingiapprovalifromidrugiregulatorsiforitheiriformulationsiandi
bulkidrugimanufacturingiplantsi-iinimore-
developedieconomies.iThisialloweditheirimovementiintoiregulatedimarketsisuchiasitheiUSiandiEurope.

18i|iPage
iIni2014,iDr.iReddyiLaboratoriesiwasilistediamongi1200iofiIndia'simostitrustedibrandsiaccordingitoith
eiBrandiTrustiReporti2014,iaistudyiconductedibyiTrustiResearchiAdvisory,iaibrandianalyticsicompany.
Byi2007,iDr.iReddy'sihadiseveniFDAiplantsiproducingiactiveipharmaceuticaliingredientsiiniIndiaiandis
eveniFDA-
inspectediandiISOi9001i(quality)iandiISOi14001i(environmentalimanagement)icertifiediplantsimakingi
patient-readyimedicationsi–ifiveiofithemiiniIndiaianditwoiinitheiUK.
Ini2010,itheifamily-
controllediDriReddy'sideniedithatiitiwasiinitalksitoiselliitsigenericsibusinessiiniIndiaitoiUSipharmaceuti
caligiantiPfizer,iwhichihadibeenisuingitheicompanyiforiallegedipatentiinfringementiafteriDriReddy'sian
nouncedithatiitiintendeditoiproduceiaigenericiversioniofiatorvastatin,imarketedibyiPfizeriasiLipitor,iani
anti-
cholesterolimedication.iReddy'siwasialreadyilinkeditoiUKipharmaceuticalsimultinationaliGlaxoiSmithk
line.

ORGANIZATIONALiCULTURE

➔ Theiorganisationalicultureidefinesitheiworkplaceianditheigrowthiofitheiorganisation.iTheisucces
siofiDr.iReddy'siisidueitoitheiorganisationalicultureithatiitipossesses.iTheicultureiofitheiorganisa
tioniisidefinedibyitheigrowthistory.iDr.iReddy'sihadiaicultureitoiraiseifundsitoigrowitheiribusine
ss.iTheyiraiseitheifundsitoiacquireitheiricounteripartsitoiaddivalueianditheioperationsiofiotheric
ompaniesiintoiaisingleiorganisation.iTheigrowthiofitheicompanyidepictsitheideterminationiofith
eiemployeesiworkingiinitheiorganisation.i

➔ TheivisioniofiDr.iReddy'siisi“toimakeitheiworldimoreisafeiandiaihappieriplace”.iTheivisioniand
imissioniofitheicompanyienablesithemitoicreateiobjectivesithatiwouldigiveitheiorganisationithei
rigoalsiwhichitheyineeditoiachieve.iTheseiobjectiveiareinotionlyiforitheitopimanagementibutithe
yiareirunidownitoitheiemployeesialsoisoithatitheyicanikeepiupiwithitheigoalsiofitheiorganisatio
nianditheyicanicontributeitheirishareiiniachievingithat.iDr.iReddy'sitriesitoikeepitheiemployeesi
motivatedithroughivariousiappraisaliandiincentives.i

➔ Theicoreivaluesiofitheiorganisationiareipursuitiofiexcellence,irespectiequality,itransparency,iand
idoithingsidifferentlyikeepsitheiemployeesiofitheicompanyimotivated.iTheicultureiofitheicompa
nyiisitoikeepitheiemployeesifitiandihealthyianditoiprovideithatitheyihaveiestablishediplayiareaif
orithem.iCommunicationiisitheikeyivalueithatitheicompanyithrivesion.iToiincreaseicommunicati
onibetweenitheipeers,itheyihaveikeptitheiricubiclesiwallsiailittleilowerithaniusualitoikeepitheirie
mployeesiinteractingiwithieachiother.iTheicultureiofitheicompanyiisitoiencourageitheiriemploye
esithroughicoreivalueiandithatiiniturniincreasesitheiribrandinameiinitheimarketiandithatiincrease
sitheicustomer’sitrustionitheicompany.i

7SiFRAMEWORK

➔ Thei7SiframeworkiofitheicompanyiDr.iReddy'siisiasifollows:i
1. Strategy:i-
iTheistrategyiappliedibyitheicompanyiDr.iReddy'siisitheibesticostiprovideriinitheimarket
.iTheyihaveianalyseditheiIndianimarketianditheiIndianicustomersianditheyihaveisegment

19i|iPage
 edithemiintoivariousicategories.iCategoriesionitheibasisiofigender,iage,iandialsoibasedio
nitheigeography.i
2. Structure:i-iTheistructureiofitheicompanyiDr.iReddy'siisitheitop-
downimanagementistructure.iAtitheitopitheyihaveishareholdersiasidiscussediinitheiearlie
ripart.iAfterithatitheyihaveiboardiofidirectorsiandiCEO.iThenitopimanagementianditheni
middleiandilowerimanagement.iAtitheibottomiofitheihierarchy,itheyihaveideliveryiperso
nsiwhoiareiinicontactiwithitheicustomers.
3. System:i-
iTheisystemiandiworkingiprocessiisisimpleiforiDr.iReddy's.iAtitheistartitheyiprocureian
dipurchaseitheiproductsiforitheicustomersithatiareitoibeisolditoitheicustomers.iAfterithati
logisticsipartilooksiafteriwarehousingiandideliveryitime.iAfterithatitheyisellitheiproductit
oitheicustomerithroughidifferentilogisticsiassociates.iIfithereiisireturniofitheiparcelithenit
heiproductiisiagainitransporteditoitheiwarehouse.
4. SharediValue:i-
iTheisharedivaluesiwithinitheiorganizationiofiDr.iReddy'siareicustomerisatisfaction,iown
ership,ipursuitiofiexcellence,irespectiequality,itransparencyiandiinnovation.iTheyiwantit
oiinculcateiallitheivaluesiinieachiandieveryiemployeeiinitheiricompanyisoithatitheyicani
createiaimarketibrandiforithemianditheseivaluesiwillihelpithemireachitheirigoals.
5. Style:i-
iTheistyleiofitheicompanyiisitoiinculcateiallitheivalueitoiconqueritheirimissioniandiobjec
tivesiforiwhichitheyithriveitoiexist.iTheistyleiofitheicompanyiisitoiacquireitheifundingito
iexpandiandicollaborateiwithivariousibrandsitoisellitheiriproductsionitheionlineiportal.i
6. Staff:i-
iTheistaffiofitheicompanyiDr.iReddy'siareiloyalitoitheiriobjectivesiandicoreivaluesiofith
eicompany.iDr.iReddy'sihasioveri20,000iemployeesiworkingiforithemianditheigoaliofiea
chiandieveryiemployeeiisitoiachieveimaximumioutcomeiasipossible.i
7. Skills:i-
iSkillsiofitheicompanyiliesiwithitheiriemployeesianditheirialliances.iTheyihaveiskilledie
mployeesiinitermsiofitechnologyianditakingicareiofitheicustomers.iTheyiinnovateieveryi
timeitheyifindisomethinginewiandiactiuponiitiquickly.iTheimarketingiteamiandisalesitea
miareiskilledienoughitoibringitheicompanyiactiveiusers.

COMPETITIVEiPOSITION
➔ TheicompetitiveipositioniofitheicompanyiDr.iReddy'siis:i
1. Threatitoinewientrant:i-
iTheithreatitoinewientrantiforitheicompanyiDr.iReddy'siisiless.iAsitheicompanyiisitheipi
oneeriiniprovidingibrandediproductsiofifashioniandilifestyleionionlineiportal,iitihasisetiu
piaibrandinameiforiit.iToiimprove,itheyibringiininewiinnovationiinitechnologyitoiremain
iatitheitopiofitheimarket.i
2. Threatiofisubstituteiproduct:i-
iTheithreatiofisubstituteiproductiisilowiforiDr.iReddy's.iAsitheisubstituteiproductiisisoci
alimediaiandilocaliretailishop,ipeopleitenditoishopionlineidueitoidiscountedipriceiandiva

20i|iPage
 riousioffers.iDr.iReddy'siprovidesidooristepideliveryiandisellsibrandediitemsiwhichiarein
otiavailableiwithitheilocalisuppliers,iwhichiisianiadvantage.
3. Bargainipowerioficustomer:i-
iBargainipowerioficustomeriisilowiasitheyicanichooseifromitheioffersitheyiareigettingia
nditheyicannotinegotiateitheipriceiwhichiisioffereditoithem.
4. Bargainipoweriofisupplier:i-
iThereiareicertaininormsisetibyiDr.iReddy'sitoitheisupplieriinitermsiofipricing.iTheibarg
ainipoweriofisupplieriisihigheriwhenitheisupplierisellsibrandediitemsiandionlyitheyicani
provideithatiproduct.iProductsilikeiLevisijeansiareisoldiatitheipriceisetibyitheisupplierian
dinotibyiDr.iReddy's.i
5. Competitors:i-
iTheicompetitioniisihighiiniIndianimarketiasithereiareinationaliandiinternationalibrandsi
andigenericiproducersiwhoiareiinterestediinisellingitheidrugs.

PROBLEMiANALYSIS
PROBLEMS ANALYSIS

• Limitediclinicalitrialsiduringitheipande
mici
Foripharmaceuticalicompaniesirunningiclinicali
trialsiforianythingiotherithaniCOVID-
19ivaccines,itheipandemicicausedihugeiinterrup
tions.iForisomeimoreifortunateibusinesses,itheii
mpactiwasionlyitemporary,ianditrialsihaveisinc
eirestarted.iUnfortunately,ihowever,ithousandsi
ofitrialsiworldwideihaveihaditoibeipostponedior
idiscontinuedialtogether.i
Becauseinewidrugiapprovalsidependionisuccess
fulitrials,ithisihasimeantitheilossiofiaistaggering
iamountiofiresearch,idrugidevelopmentiandimo
ney.iAsiairesult,ibothitheiindustryiandithoseiwh
oifundiitihaveisufferedifinancially.i

• Theicostiofiinnovationiandifastievolutio Theidemandiforiinnovationispikediintenselyiini
n 2020,icreatingiaihugeifinancialiimpactiacrossith
eientireiindustry.i
Healthcareiprovidersiandipharmaceuticalidevel
opersiwhoididn’tidealidirectlyiwithiCOVID-
19ifoundisecuringigovernmentioriphilanthropici
fundingidifficult.iAndieveniorganisationsithatif
ocusedionimoreidirectlyidealingiwithitheipande
miciwillifeelitheifinancialistrainiofiinnovationi
welliintoi2021iandibeyond.i

21i|iPage
 • Supplyichainidisruptions Justiasiwithialliindustries,isupplyichainidisrupti
onsihaveiemergediasioneiofitheipharmaceutical
iindustry’sibiggestichallengesiini2021.i
WithiaiheavyirelianceioniChinaiforirawimateria
ls,iandioniIndiaiforigenericidrugiproduction,ith
eiindustryiisinowiexperiencingihugeisupplyisho
rtages.iAccordingitoitheiUSiFoodiandiDrugiAd
ministration’siCenteriforiDrugiEvaluationiandi
Research,iChinaiandiIndia,icombinediaccountif
ori31%iofiFDA-
registeredifacilitiesiarounditheiglobe.iAndiwithi
bothicountriesihavingibeenihitisoihardibyiCOV
ID-
19,itheisupplyichainiworldwideiisistruggling.i

CIPLA
GROWTHiANALYSIS
ItiwasifoundedibyiKhwajaiAbduliHamiediasi'TheiChemical,iIndustriali&iPharmaceuticaliLaboratories'
iini1935iiniMumbai.iTheinameiofitheicompanyiwasichangeditoi'CiplaiLimited'ioni20iJulyi1984.iInithei
yeari1985,itheiUSiFDAiapproveditheicompany'sibulkidrugimanufacturingifacilities.iLedibyitheifounder
'sisoniYusufiHamied,iaiCambridge-
educatedichemist,itheicompanyiprovidedigenericiAIDSiandiotheridrugsitoitreatipooripeopleiinitheideve
lopingiworld.iIni1995,iCiplailaunchediDeferiprone,itheiworld'sifirstioraliironichelator.iIni2001,iCiplaio
fferedimedicinesi(antiretrovirals)iforiHIVitreatmentiatiaifractionalicosti(lessithani$350iperiyeariperipati
ent).
Ini2013iCiplaiacquireditheiSouthiAfricanicompanyiCipla-
Medpro,ikeptiitiasiaisubsidiary,iandichangediitsinameitoiCiplaiMedproiSouthiAfricaiLimited.iAtitheiti
meiofitheiacquisitioniCipla-
MedproihadibeeniaidistributionipartneriforiCiplaiandiwasiSouthiAfrica'sithirdibiggestipharmaceuticalic
ompany.iTheicompanyihadibeenifoundediini2002iandiwasiknowniasiEnaleniiPharmaceuticalsiLtd.iIni2
005,iEnaleniiboughtiallitheisharesiofiCipla-
Medpro,iwhichihadibeeniaijointiventureibetweeniCiplaiandiMedproiPharmaceuticals,iaiSouthiAfricanig
enericsicompany,iandiini2008iitichangediitsinameitoiCipla-Medpro.

ORGANIZATIONALiCULTURE
➔ Cipla’sicultureicanibeiunderstoodibyitheigrowthiofitheicompanyiasidueitoiwhatiobjectivesitheyi
achieveitheirisuccess.iTheivisioniofitheicompanyiisi“Toibeiearth’simosticustomericentricicompa
ny,iwhereicustomericanifindiandidiscoverianythingitheyimightiwantitoibuyionline”.iTheimissio
niofitheicompanyiisi“Weistriveitoiofferioricustomersitheilowestipossibleiprices,itheibestiavailab
leiselection,ianditheiutmosticonvenience”.iTheivisioniandistatementidepictsitheicultureiofitheico
mpanyianditheiobjectivesithatitheyithriveitoicompleteitoiachieveitheirigoals.iTheicultureiofithei
companyiisitoiprovideitheicustomeritheilowestipriceiavailableiinitheimarket.iTheicultureiofithei

22i|iPage
 companyiisitoiencourageitheiemployeesiandimotivateitoiachieveitheigoalsiofitheicompany.iThei
objectiveiofitheicompanyiisitoiexpanditheibusinessiglobally.iTheicompanyiisicustomer-
centric.iTheyiprovideiailargeiproductimixitoitheiricustomer.iCiplaihasitraineditheiriemployeesit
oibeiresponsibleiforitheijobiandiworkitheyido.iSenseiofiresponsibilityikeepsitheiworkiflowiflaw
lesslyiasitheyiworkiefficientlyiandierrorifindingibecomesieasyiforitheicompany.iTheicompanyia
lsoihasistartedianiintrapreneurialiactivitiesiiniwhichitheiemployeesiareiencourageditoifindinewib
usinessiideasianditechnologyitoiimproveitheigrowthirateiofitheicompany.

7SiFRAMEWORK
➔ Thei7SiframeworkiofitheicompanyiCiplaiis:i
1. Strategy:i-
iTheistrategyiappliedibyitheicompanyiCiplaiisitheilowicostiprovideriinitheimarket.iTheyi
haveianalyseditheiIndianimarketianditheiIndianicustomersianditheyihaveisegmentedithe
miintoivariousicategories.i
2. Structure:i-iTheistructureiofitheicompanyiCiplaiisitheitop-
downimanagementistructure.iTheyihaveiboardiofidirectorsiandiCEO.iThenitopimanagem
entiandithenimiddleiandilowerimanagement.iAtitheibottomiofitheihierarchy,itheyihaveid
eliveryipersonsiwhoiareiinicontactiwithitheicustomers.iTheitechnicaliteamiplaysiaivitalir
oleiinitheicompany,ibecauseitheyiinnovateiandikeepitheiportaliintactitoirunitheiwebsiteia
nditheicompanyiwell.iThereiareivariousidepartmentsilikeiR&D,iHR,ifinance,itechnology
,iAI,imarketing,ilogistics,ietc.iSo,ithisiisitheistructureiofitheicompanyiCipla.i
3. Systems:i-
iTheisystemiandiworkingiprocessiisisimpleiforiCipla.iAtitheistartitheyiprocureiandipurc
haseitheiproductsiforitheicustomersithatiareitoibeisolditoitheicustomers.iAfterithatilogisti
csipartilooksiafteriwarehousingiandideliveryitime.iAfterithatitheyisellitheiproductitoithei
customerithroughidifferentilogisticsiassociates.iIfithereiisireturniofitheiparcelithenitheipr
oductiisiagainitransporteditoitheiwarehouse.
4. Sharedivalues:i-
iTheisharedivalueiofiCiplaiareilowiprices,ifastideliveryispeed,iandivastiselection.iThesei
valuesiareisharedibyitheicompanyiwithitheiriemployeesisoithatitheyicaniunderstanditheii
mportanceiofieachiandieveryivalueianditheyicaniworkionitheipathiwhichiisinotiagainstit
heivaluesiofitheicompany.i
5. Style:i-
iTheistyleiofitheicompanyiisitoiacquireitheibusinessesiiniwhichitheyiwantitoiexpand.iTh
eyialsoiinnovateiinitheitechnologyitoiintroduceinewiproductsiinitheimarketianditheyiarei
theipioneeriofionlineiretailiiniPharmaiindustry.i
6. Staff:i-
iTheistaffiofitheicompanyiCiplaiareiloyalitoitheiriobjectivesiandicoreivaluesiofitheicomp
any.iCiplaihasioveri7000iemployeesiworkingiforithemianditheigoaliofieachiandieveryie
mployeeiisitoiachieveimaximumioutcomeiasipossible.
7. Skills:i-
iSkillsiofitheicompanyiliesiwithitheiriemployeesianditheirialliances.iTheyihaveiskilledie

23i|iPage
 mployeesiinitermsiofitechnologyianditakingicareiofitheicustomers.iTheyiinnovateieveryi
timeitheyifindisomethinginewiandiactiuponiitiquickly.iTheimarketingiteamiandisalesitea
miareiskilledienoughitoibringitheicompanyiactiveiusers.i

COMPETITIVEiPOSITION
➔ TheicompetitiveipositioniofitheicompanyiCiplaiis:i
1. Threatitoinewientrant:i-
iTheithreatitoinewientrantiisilowiforiCipla.iTheientryibarrieriareihighitoienteriinitheiindu
stryiasicurrentlyiCiplaiisisellingieveryiproductiavailableiinitheimarketiatiaireasonableipri
ce.iThisicreatesiaiproblemiforinewientrantiasitheyiwillihaveinothingimoreitoioffer.i
2. Threatiofisubstituteiproduct:i-
iTheithreatitoisubstituteiproductiisilowiforiCipla.iSocialimediaiandilocalistoreidoesinotip
rovideiconvenienceiandioffersiasimuchiasiCiplaidoes.i
3. Bargainipowerioficustomers:i-
iBargainipowerioficustomeriisilowiasitheyicanichooseifromitheioffersitheyiareigettingia
nditheyicannotinegotiateitheipriceiwhichiisioffereditoithem.iButiCiplaidoesinotileaveiaic
hanceiforitheicustomeritoibargainiasitheyiprovideileasticostipossible.
4. BargainipoweriofiSupplier:i-
iThereiareicertaininormsisetibyiCiplaitoitheisupplieriinitermsiofipricing.iTheibargainipo
weriofisupplieriisihigheriwhenitheisupplierisellsibrandediitemsiandionlyitheyicaniprovid
eithatiproduct.iProductsilikeiGucciiwatchesiareisoldiatitheipriceisetibyitheisupplieriandin
otibyiCipla.
5. Competitors:i-
iTheicompetitioniisihighiiniIndianimarketiasithereiareimanyionlineiportalilikeiSuniPhar
maitoicompeteiwithiCipla.iCiplaihasitheicompetitiveiadvantageiasitheyiofferimanyilocali
productsithatiareinotiavailableioniCiplaianditheyihaveitheihighestinumberiofiusersiiniInd
ianimarket.

PROBLEMiANALYSIS

PROBLEMS ANALYSIS

24i|iPage
 • Culturalifocusioniprevention,iratheritha
nitreatmenti
Generallyispeaking,itheiculturalishiftitowardsia
ifocusionipreventing,iratherithanicuring,imanyi
diseasesiisigreatinews.iHowever,iforitheipharm
aceuticaliindustry,iitimeansiaiseriousidropiinifu
nding,ibothigovernmentiandiotherwise.i
Asinewidevelopmentsiini‘lifestyleicuresi’suchia
sieliminationidietsiandiincreasingiphysicaliactiv
ityibecomeicommonplace,iconsumersiareimovi
ngiawayifromimedicationiasitheiprimaryitreatm
entiforidisease.iWithithisitrendicomesilowerime
dicationiturnoveriandimoreiroadblocksitoisecuri
ngidesperatelyineededifunding.i

• Developinginewicuresiforipresentlyiinc
urableidiseases
• Identifyingicuresiforipresentlyiincurable
idiseasesisuchiasicancer,iAlzheimer’sia
ndiepilepsyiisiaichallengeithatitheiphar
maceuticaliindustryihasialwaysifaced.iQ
uickisolutionsiareiextremelyirare,iandire
searchiandidevelopmentiisiailongigame.
i

CADILLAiPHARMA
GROWTHiANALYSIS
Cadilaiwasifoundediini1952ibyiRamanbhaiiPateli(1925–
2001),iformerlyiailectureriinitheiL.M.iCollegeiofiPharmacy,iandihisibusinessipartneriIndravadaniModi.
iItievolvedioveritheinextifouridecadesiintoianiestablishedipharmaceuticalicompany.
Ini1995itheiPateliandiModiifamiliesisplit;itheiModiifamily'sishareiwasimovediintoiainewicompanyicall
ediCadilaiPharmaceuticalsiLtd.,iandiCadilaiHealthcareiLtdibecameitheiPatelifamily'siholdingicompany.
iCadilaiHealthcareihadiitsiinitialipubliciofferingionitheiBombayiStockiExchangeiini2000iasistockicodei
532321.
Ini2015itheicompanyiacquiredianotheriIndianipharmaceuticalicompanyicallediGermaniRemedies.iOni2
5iJunei2007,itheicompanyiacquirediQuímicaieiFarmacêuticaiNikkhoidoiBrasiliLtdai(Nikkho)iasipartiof
iZydusiHealthcareiBrasiliLtda.
Ini2010,iCadilaiHealthcareireceivediaiWellcomeiTrustiAwardiunderithei"R&DiforiAffordableiHealthca
reiiniIndia"iinitiative.
Ini2014,iCadilaiHealthcareilauncheditheiworld'sifirstiadalimumabibiosimilariunderitheibrandinameiExe
mptiaiatione-
fifthitheioriginator'siprice.iZydusiCadilaiHealthcareihasialsoilaunchediitsifirstiresearchibasedidrugimole
culeiSaroglitazariinitreatmentiofiDiabeticiDyslipidemiaiunderibrandinamei"Lipaglyn".iSoviHepiisitheif
irstisofosbuviribrandilaunchediiniIndiaibyiZydusiiniyeari2015.
Ini2019,iinjectableiketorolacitromethamineimanufacturedibyiZydusi(CadilaiHealthcare)iwasirecalledidu
eitoimicrobialigrowth.
Ini2020,iZydusiCadila'sidrugiDesidustatireceivediapprovalibyitheiUSFDAitoiinitiateiclinicalitrialsionic
anceripatients.

ORGANIZATIONALiCULTURE

25i|iPage
➔ Organizationalicultureiofitheicompanyidependsionitheibehaviouriofitheiemployeesiandihowithe
yiadhereitoitheivision,imission,iandiobjectivesiofitheiorganization.iTheivisioniandimissioniofith
eicompanyiisi“Ouripurposeiisitoishapeitheifutureiofitradeitoiunlockitheihiddenivalueiofieverythi
ng”.iThisivisioniandimissioniofitheiorganizationidepictsitheigrowthistoryiofitheiorganization.iD
ueitoithisistatements,itheyiareiableitoihandleimoreithani10000iemployeesiinitheiorganizationiacr
ossi5icontinents.iTheigrowthiofitheiorganizationiisidueitoitheimotivationigivenitoitheiemployee
sitoiadhereitoitheiobjectivesiofitheicompany.i

➔ TheiobjectiveiofitheicompanyiisitoiincreaseitheipenetrationiinitheiPharmaiindustryibyiproviding
ivariousiproductsiandienteringiintoitheimarketplace.iTheseiobjectivesiareimadeitoienhanceitheiri
goalsiandialsoitheyihaveimadeithisitoiincreaseitheiriproductivityiwithinitheiorganization.iTheim
anagementisupportsitheiemployeesitoiworkihardibyiprovidingiincentivesiandiappraisaliandithati
initurnihelpsitheicompanyitoiincreaseitheiefficiency.iTheibehaviouriofipeopleitowardsitheicomp
anyiisigoodiasitheiattritionirateiisiloweriinithisifirm.i

7SiFRAMEWORK
➔ Thei7SiframeworkiofitheicompanyiCadillaiPharmaiis:i
1. Strategy:i-
iTheistrategyiappliedibyitheicompanyiCadillaiPharmaiisitheidifferentiationiinitheimarket
.iTheyihaveianalyseditheiIndianimarketianditheiIndianicustomersianditheyihaveisegment
edithemiintoivariousicategories.i
2. Structure:i-iTheistructureiofitheicompanyiCadillaiPharmaiisitheitop-
downimanagementistructure.iTheyihaveiboardiofidirectorsiandiCEO.iThenitopimanagem
entiandithenimiddleiandilowerimanagement.iAtitheibottomiofitheihierarchy,itheyihaveic
ustomericareiandicheckingidepartmentiwhoiareiinicontactiwithitheicustomers.iTheitechn
icaliteamiplaysiaivitaliroleiinitheicompany,ibecauseitheyiinnovateiandikeepitheiportaliint
actitoirunitheiwebsiteianditheicompanyiwell.iThereiareivariousidepartmentsilikeiR&D,i
HR,ifinance,itechnology,imarketing,ilogistics,ietc.i
3. Systems:i-
iTheisystemiandiworkingiprocessiisisimpleiforiCadillaiPharma.iFirstly,itheiselleriofithei
productikeepsitheilistionitheiportalithatihe/sheiwantsitoisell.iIticanibeibrandinewiandials
oiusediproducts.iAfterithatitheitestingiandicheckingiteamiofiCadillaiPharmaichecksitheip
rofileiandiproductithoroughlyibeforeilistingitheiproductionitheiportal.
4. Sharedivalues:i-
iTheisharedivalueiofiCadillaiPharmaiareilowiprices,iauthorizediseller,imarketipenetratio
n,iandivastiselection.iTheseivaluesiareisharedibyitheicompanyiwithitheiriemployeesisoit
hatitheyicaniunderstanditheiimportanceiofieachiandieveryivalueianditheyicaniworkionith
eipathiwhichiisinotiagainstitheivaluesiofitheicompany.i
5. Style:i-
iTheistyleiofitheicompanyiisitoiacquireitheibusinessesiiniwhichitheyiwantitoiexpand.iTh
eyialsoiinnovateiinitheitechnologyitoiintroduceinewiproductsiinitheimarket.
6. Staff:i-
iTheistaffiofitheicompanyiCadillaiPharmaiareiloyalitoitheiriobjectivesiandicoreivaluesiof

26i|iPage
 itheicompany.iCadillaiPharmaihasioveri10000iemployeesiworkingiforithemianditheigoal
iofieachiandieveryiemployeeiisitoiachieveimaximumioutcomeiasipossible.i
7. Skills:i-
iSkillsiofitheicompanyiliesiwithitheiriemployeesianditheirialliances.iTheyihaveiskilledie
mployeesiinitermsiofitechnologyianditakingicareiofitheicustomers.iTheyiinnovateieveryi
timeitheyifindisomethinginewiandiactiuponiitiquickly.iTheimarketingiteamiandisalesitea
miareiskilledienoughitoibringitheicompanyiactiveiusers.iTheicompanyihasimoreithani10
0imillioniuniqueiusers.i

COMPETITVEiPOSITION
➔ TheicompetitiveipositioniofitheicompanyiCadillaiPharmaiis:i
1. Threatitoinewientrant:i-
iTheithreatitoinewientrantiisilowiforiCadillaiPharma.iTheientryibarrieriareihighitoienterii
nitheiindustryiasicurrentlyiCadillaiPharmaiisisellingieveryiproductiavailableitoicustomer
iatiaipriceisetibyitheiselleriandinotitheicompany.iAnditheiproductsisoldibyitheicompanyi
areihighlyiautomotiveiwhichianyiothericompanyiisinotiselling.ii
2. Threatiofisubstituteiproduct:i-
iTheithreatitoisubstituteiproductiisilowiforiCadillaiPharma.iTheisubstituteiproductiforithi
sicompanyiisionlyitheidealersiinitheimarketiwhoiselliatihigherimargins.iButiCadillaiPhar
maidoesinotiselliatihigherimargin,itheyihaveinominalichargesiforithat.i
3. Bargainipowerioficustomers:i-
iBargainipowerioficustomeriisihighiasitheyicanichooseifromitheioffersitheyiareigettingia
nditheyinegotiateitheipriceiwhichiisioffereditoithem.i
4. BargainipoweriofiSupplier:i-
iThereiareicertaininormsisetibyiCadillaiPharmaitoitheisupplieriinitermsiofipricing.iTheib
argainipoweriofisupplieriisihigheriwhenitheisupplierisellsiitemsithatiareiiniaigoodicondit
ioniavailableiatiailoweripriceithanitheimarket.iTheyihaveitheiauthorityitoinegateitheioffe
riplacedibyitheicustomer.i
5. Competitors:i-
iTheicompetitioniisilowiinitheiIndianimarketiforiCadillaiPharmaiasithisioffersivariousipr
oductsiwhichiareibeingiusediforioveritheiyears.iCertainiproprietaryiproductsihelpsitheico
mpanyistandioutifromiothericompanies

PROBLEMiANALYSIS
PROBLEMS ANALYSIS

27i|iPage
 • RisingiCustomeriExpectations
• Theimoreisuccessesicomeitheiwayiofiph
armaceuticalicompanies,iproblemsistarti
toipileiup.iCustomersinowiwantimoreiof
fers,ibetterimedicinesiandilower-
pricedidrugs.iTheipharmaiindustryiisifa
cingicompetitiveicommercialistrife,iwit
hiconsumersibecomingimoreiandimorei
awareiandiruthless.iPatientsiwantibetteri
treatments,itherapiesiandimedicines,iati
moreiaffordableiprices.i

• DroppingiScientificiProductivity
• Theilastiteniyearsihaveiseeniconsistency
iwithiregardsitoidrugiresearch,iwhichiisi
quiteidisheartening.iMostiofitheiBigiPh
armaiplayersiareinotibeingiableitoicome
ioutiwithiproductiveiresearchithatileadsi
toiblockbusteridrugs.iForimedicineiprod
uctionitoiriseioutiofisuchiaislump,iweiw
illineedisignificantigainsiinitermsiofisci
entificiproductivity.

• ManagementiandiMarketing •
Theiviciousiandicompetitiveicircleiofim
arketingiandimanagementiisianotherigre
atiworryiforitheiindustry.iSuchiaiculture
iwhichifocusesioniprofitimaximisationid
LUPIN oesinoticomplementiresearchiandiscienti
ficidiscovery.i
GROWTHiANALYSIS
Lupiniwasifoundediini1968ibyiDeshiBandhuiGupta,iwhoiwasiaiprofessoriofichemistryiatiBITS-
Pilani,iRajasthan.iGuptaimoveditoiMumbaiiinithei60sitoiworkionihisibusinessienterpriseiforiwhichiiniti
allyiheihadiinitiallyiborrowediRsi5000ifromihisiwifeitoifundihisiventure.iSubsequentifundingifromiCen
traliBankiofiIndia,itheicompanyiwasiableitoistartitheirimanufacturingifacilityiforiproducingifoliciacidia
ndiironitabletsiforiGovernmentiofiIndiaimotheriandichildihealthiprogram.iLateriLupinistartedimanufact
uringiantiiTBidrugsiwhichiationeipointiformedi36%iofitheicompanyisalesiandiwasiconsiderediasitheilar
gestiTBidrugsimanufactureriinitheiworld.
AfterisuccessiwithiLupin,iini1988iGuptaifoundeditheigroup'siCSRiarm,itheiLupiniHumaniWelfarei&iR
esearchiFoundationi(LHWRF).iThisiinitiativeiwasidedicateditoisustainableiruralidevelopmentiwithithei
aimitoiupliftifamiliesilivingibelowitheipovertyiline.
Asitheicompanyigrew,iiniJulyi2015itheicompanyiannouncediitsiintentionitoiacquireiGavisiPharmaceuti
calsiandiNoveliLaboratoriesifori$880imillion.
Theifounder,iDeshiBandhuiGuptaidiediiniJunei2017iandiwasisubsequentlyireplacediasichairmanibyihisi
wife,iManjuiDeshbandhuiGupta.
IniOctoberi2019,iPharmaimajorilupinilimitediannounceditodayitheiAppointmentiofiSreejiiGopinathami
asiChiefiInformationiOfficeri(CIO).
IniMarchi2019,itheiUSiFDAiputiseveraliLupinidrugiplantsioninoticeiforiqualityiproblems,iandiindicate
diitimightinotiapproveifutureiLupinidrugiapplications.

Overitheiyears,iLupinihasigrowniandiexpandediintoinewiareasiandiregions,imanufacturingidrugsithatie
xtenditheipromiseiofigoodihealthitoicommunitiesiacrossitheiglobe.iBeginningiwithitwoiemployeesi—
iaipeon-cum-packeriandiaipart-timeitypisti—

28i|iPage
iLupin’sicurrentiglobalifootprintispansi11icountries,iacrossisixicontinents.iThisijourneyihasibeenimadei
possibleithanksitoitheivisioniandiconvictioniofiMr.iDeshiBandhuiGupta.

ORGANIZATIONALiCULTURE

➔ Aniorganisationiworksioniemployeesianditheikeyipeopleiinianiorganisationiareitheiemployees.i
Theicultureiofianiorganisationidefinesibehaviouriofitheiemployeesiandivaluesiofitheicompany.i
Theiorganisationicultureiisiunderstoodibyitheicompany’sigrowth.iTheivisioniandimissionistatem
enticlarifiesitheilongitermigoalsiofitheiorganisation.iIticlarifiesithatitheyionlyifocusesionitheibus
inessiandigoiglobaliiniB-
Bimarket.iItialsoiclarifiesithatitheyiwantitoideliverisuperiorivalueitoiallitheipeopleiinitheisociety
.i

➔ Theicoreivaluesiofitheiorganisationihelpsitheiorganisationitoisetitheiobjectivesiandigoalsiofithei
company.iTheicoreivaluesiofitheicompanyiareiteamiwork,iresponsible,iintegrity,iandipassion.iT
heseivaluesihelpsitheiorganisationitoimotivateiandiencourageitheiemployeesitoiworkiharditoiach
ieveitheigoalsiandiobjectivesiofitheicompany.iThisihelpsitheicompanyitoigrowitheibusinessiandi
theicustomeribaseiofitheicompany.iTheiemployeesiadhereitoitheicoreivaluesitoiprovideitheicust
omersibestipossibleiexperienceiofitheiproductsiofitheicompany.iDueitoiteamiworkivalue,itheiem
ployeesiunderstandieachiandieveryipeersiworkiandialsoihelpsieachiotheritoireachitheirigoals.iIni
turniitiincreasesitheibusiness.iSo,ithisiisitheiorganisationalicultureiofitheicompany.iTheiachieve
mentsidiscussediinitheiaboveisectioniisiachievedidueitoitheivalueiandiobjectivesitheyifollow.i

7SiFRAMEWORK
➔ Thei7SiframeworkiofitheicompanyiLupiniis:i
1. Strategy:i-
iTheistrategyiappliedibyitheicompanyiLupiniisitheibesticostiprovideriinitheimarket.iThe
yihaveianalyseditheiIndianimarketianditheiIndianicustomersianditheyihaveisegmentedith
emiintoivariousicategories.iIndianipeopleiwantsiproductiatiailoweripriceidoitheyiofferilo
westipriceipossible.iTheibusinessicustomersiorderiinibulkiandiforithat,itheyiwillisearchit
heibestipriceiunderitheiribudget.i
2. Structure:i-iTheistructureiofitheicompanyiLupiniisitheitop-
downimanagementistructure.iTheyihaveiboardiofidirectorsiandiCEO.iThenitopimanagem
entiandithenimiddleiandilowerimanagement.iAtitheibottomiofitheihierarchy,itheyihaveic
ustomericareipeopleiwhoicontactsitheiclientsidirectly.iTheitechnicaliteamiplaysiaivitaliro
leiinitheicompany,ibecauseitheyiinnovateiandikeepitheiportaliintactitoirunitheiwebsiteian
ditheicompanyiwell.iThereiareivariousidepartmentsilikeiHR,ifinance,itechnology,imarket
ing,ilogistics,ietc.i
3. Systems:i-
iTheisystemiandiworkingiprocessiofiLupiniis,itheyiapproachitheiclientianditheisuppliersi
toilistitheicompany’siproductionitheiriwebsite.iTheicompanyialsoihelpsithemitoicreateiai

29i|iPage
 websiteiforithem.iAfterithat,itheisalesiteamistartsitoigathericustomeriforitheinewilistingi
andiforithatitheicallitheicustomersiwhoishowiinterestibyiprovidingicontactiinformation.i
4. Sharedivalues:i-
iTheisharedivalueiofiLupiniareiteamiwork,iresponsible,iintegrity,iandipassion.iTheseival
uesiareisharedibyitheicompanyiwithitheiriemployeesisoithatitheyicaniunderstanditheiimp
ortanceiofieachiandieveryivalueianditheyicaniworkionitheipathiwhichiisinotiagainstithei
valuesiofitheicompany.i
5. Style:i-
iTheistyleiofitheicompanyiisitoiacquireitheibusinessesiiniwhichitheyiwantitoiexpand.iTh
eyialsoiinnovateiinitheitechnologyitoiintroduceivalueiaddedilistingiaccordingitoitheirisea
rches.iTheistyleiiditoiacquireitheisupplieritoiprovideidirectoryiforitheicustomers.ii
6. Staff:i-
iTheistaffiofitheicompanyiLupiniareiloyalitoitheiriobjectivesiandicoreivaluesiofitheicom
pany.iLupinihasioveri3600iemployeesiworkingiforithemianditheigoaliofieachiandieveryi
employeeiisitoiachieveimaximumioutcomeiasipossible.i
7. Skills:i-
iSkillsiofitheicompanyiliesiwithitheiriemployeesianditheirialliances.iTheyihaveiskilledie
mployeesiinitermsiofitechnologyianditakingicareiofitheicustomers.iTheyiinnovateieveryi
timeitheyifindisomethinginewiandiactiuponiitiquickly.iTheimarketingiteamiandisalesitea
miareiskilledienoughitoibringitheicompanyiactiveiusersiandiactiveibusinessipersonnel.i

COMPETITVEiPOSITION
➔ TheicompetitiveipositioniofitheicompanyiLupiniis:i
1. Threatitoinewientrant:i-
iTheithreatitoinewientrantiisilowiforiLupin.iTheientryibarrieriareihighitoienteriinitheiind
ustryiasicurrentlyiLupiniisisellingieveryiproductiavailableitoicustomeriatiaipriceisetibyit
heiselleriandinotitheicompany.i
2. Threatiofisubstituteiproduct:i-
iTheithreatitoisubstituteiproductiisilowiforiLupin.iTheisubstituteiproductiforithisicompan
yiisionlyitheidealersiinitheimarketiwhoiselliatihigherimargins.iButiLupinidoesinotiselliat
ihigherimargin,itheyihelpicustomericontactitheisupplieridirectly.i
3. Bargainipowerioficustomers:i-
iBargainipowerioficustomeriisihighiasitheyicanichooseifromitheioffersitheyiareigettingia
nditheyinegotiateitheipriceiwhichiisioffereditoithem.i
4. BargainipoweriofiSupplier:i-
iThereiareicertaininormsisetibyiLupinitoitheisupplieriinitermsiofipricing.iTheibargainipo
weriofisupplieriisihigheriwhenitheisupplierisellsiitemsithatiareiiniaigoodiconditioniavaila
bleiatiailoweripriceithanitheimarket.iTheyihaveitheiauthorityitoinegateitheiofferiplacedib
yitheicustomer.i
5. Competitors:i-
iTheicompetitioniisilowiinitheiIndianimarketiforiLupin.iTheicompetitorsiareiCipla,iSuni

30i|iPage
 PharmaiETC.iTheseicompetitorsihasilowericustomeribaseiandisupplieribaseithaniLupin.i
Evenithat,itheicompanyiisitheionlyicompanyiworkingiiniB-Bimarketionlineiportal.i

PROBLEMiANALYSIS
PROBLEMS ANALYSIS

• Demandiforecasting • Theibiggestichallengeiinitheipharmaceut
icaliindustryiplayersiisitoideviseimarketi
forecastsiandienhanceitheiricustomeriser
viceilevels.iDemandiforecastingiisianies
sentialicomponentiforitheipharmaceutic
alicompaniesitoistayiaheadiinitheicompe
titioniandimatchitheisupplyitoidemand.i
Ensuringithatiallitheigoodsiareiproduced
iatitheidesireditimeiandideliverediseaml
esslyiposesiaibigichallengeitoitheipharm
aicompanies.

• Priceifluctuationiassessment •
Recentianalysisiofitheipharmaceuticaliin
• Riskimanagement •
Managingirisksiinitheidrugimanufacturi
dustryishowsithatimanyibigiplayersiinit
ngiprocessiandiqualityisystemsiisiofigre
heiindustryiareipoiseditoiwitnessitoughit
atiimportance.iForipharmaceuticaliindus
imesiifitheyifailitoiadaptiwithihealthcare
tryiplayers,iitibecomesiveryiimportantit
ianalyticsiandiotheridataianalyticsiinihe
COMPARISONiANALYSIS
oimaintainiproductiquality.iHence,iitibe
althcareiindustryitrends.iRecentlyitheiph
comesichallengingiforitheipharmaicomp
armaceuticaliindustryiisiinineediofiprop
aniesitoiidentifyipossibleirisksiassociate
eritechniquesitoianalyzeipricingistructur
diwithiaiproductioriprocessesiinvolvedii
esitoiboostiprofitimargins.iAnalyzingith
nimanufacturing,idevelopment,iandidistr
eishiftingicustomeribehavioriandifluctua
ibutioniofitheiproduct.
tingipricesiisioneiofitheibiggestichalleng
esiinipharmaceuticaliindustry.

31i|iPage
➔ TheicomparisoniofitheicompaniesiinitheiPharmaiindustryiareiprovidediinitheiaboveipieichart.iT
heipieichartishowsitheiNetirevenueianditotaliincomeiofitheiSuniPharma,iCipla,iCadillaiPharma,i
Dr.iReddy's,iandiLupin.iTheirevenueichartishowsithatitheimaximumicontributioniofirevenueiisi
generatedibyiSuniPharma,itheniCipla,itheniDr.iReddy's,itheniLupinitheniCadillaiPharma.iTheito
taliincomeichartishowsitheicontributioniofiincomeigeneratedibyitheicompanies.iFirstiisitheiSuni
PharmaifollowedibyiCipla,ifollowedibyiDr.iReddy's,ifollowedibyiLupin,ianditheniCadillaiPhar
ma.iThisishowsithatiSuniPharmaiandiCiplaiareitheimarketileadersiinitheiPharmaiindustry.i

References:i

• https://www.scnsoft.com/Pharma/types-of-
Pharma#:~:text=Within%20this%20classification%2C%20six%20types,to%2DConsumer%20(G
2C).i
• ihttps://www.ibef.org/industry/Pharma.aspxi
• https://www.grandviewresearch.com/industry-analysis/Pharma-marketi
• https://firstmonday.org/ojs/index.php/fm/article/view/3377/3046#:~:text=E%E2%80%93comme
rce%20promises%20benefits%20for,failure%20of%20e%E2%80%93commerce%20efforts.i
• https://www.yourarticlelibrary.com/marketing/marketing-management/8-main-components-of-
the-industry-structure-
explained/43571#:~:text=The%20industry%20structure%20has%20five,historically%20more%2
0profitable%20than%20others.i
• https://www.businessnewsdaily.com/6618-Pharma-alternatives.htmli
• https://www.oliverwyman.com/content/dam/oliver-
wyman/v2/events/2018/March/FROM_THE_SPEED_OF_SOUND_TO_THE_SPEED_OF_LIG
HT.pdfi

• ihttps://Pharmamasterplan.com/the-7-Pharma-business-structures/i
• https://www.slideshare.net/swayamdey/Pharma-industryi
• https://www.jstor.org/stable/2677781i

32i|iPage
• https://www.jstor.org/stable/2696539i
• AnalysisiofitheiBottleneckiofiMobileiPharmaiiniChongQingiBasedioniPESTiAnalyticaliMethod
i-iPENGiXiang-juni(CollegeiofiInformationiScienceiandiEngineering)i
• https://www.jstor.org/stable/10.2307/26201829i
• http://salemalanzi.com/pestle-analysis/i
• https://www.analyticssteps.com/blogs/success-story-SuniPharmai
• https://www.slideshare.net/Nirajkumar119/SuniPharmathe-mckinsey-7s-frameworki
• https://www.crunchbase.com/organization/Dr.iReddy'si
• https://blog.Dr.iReddy's.com/a-great-place-to-work/i
• https://blog.finology.in/entrepreneurship/Cipla-jeff-bezos-growth-storyi
• https://www.fundable.com/learn/startup-stories/Ciplai
• http://panmore.com/Cipla-com-inc-vision-statement-mission-statement-analysisi
• http://panmore.com/Cipla-com-inc-organizational-culture-characteristics-analysisi
• https://innovationtactics.com/Cipla-business-model-part-2/i
• https://en.wikipedia.org/wiki/CadillaiPharmai
• https://www.crunchbase.com/organization/CadillaiPharma-groupi
• https://www.CadillaiPharmagroup.com/story#:~:text=We%20love%20to%20unlock%20value,d
eal%20on%20something%20they%20need.i
• https://startuptalky.com/Lupin-startup-story/i
• https://corporate.Lupin.com/core-values/i
• https://www.slideshare.net/ROHITGARG119/Lupin-Pharma-business-modeli
• https://www.business-standard.com/article/companies/SuniPharma-india-revenue-grew-12-to-rs-
34-610-cr-in-fy20-losses-dropped-18-120120101431_1.htmli

• https://inc42.com/buzz/Cipla-india-deeper-in-the-red-in-fy20-as-SuniPharma-reduces-losses/i
• https://www.business-standard.com/article/companies/Dr.iReddy's-designs-revenue-up-58-to-rs-
1-719-crore-losses-increase-by-38-
120122401373_1.html#:~:text=Walmart%2Downed%20online%20fashion%20retailer,crore%20
during%20the%20same%20fiscal.i

33i|iPage