Eli Lilly in India: Rethink the Joint venture Strategy

Milton Cahuasqui - 2228384

Question 1.
I think that Eli Lilly was very smart in pursuing a joint venture to enter the Indian market. I believe that in order to familiarize yourself with the countries culture and way of doing business a joint venture is exactly what you should look in to in order to learn the most important aspects of your future costumers. During this period many multinational pharmaceutical companies had a presence in India, Eli Lilly did not. As a result of Ranbaxy’s approach to supply Eli Lilly with certain ingredients and sourcing of intermediate products to produce low cost sources, Eli Lilly felt that this would be a great opportunity to use Ranbaxy’s knowledge and get their feet on the ground in India. One of the major benefactors of this joint venture was that it allowed for Eli Lilly to save money in certain areas of investment for example, Lilly used Ranbaxy’s distribution network, they paid Ranbaxy for this service at a low cost. Eli Lilly also used Ranbaxy’s name to obtain government approvals, licenses, distribution and supplies, in other words they used Ranbaxy’s name for everything since they were new in India. There are many benefits to a joint venture as you can see, it can save you time and money on your investment, specially if you are expanding in to a foreign market, like mentioned before, one of the most important benefits to a joint venture is the fact that your company will learn the culture and business side of where you are investing your money and resources. Like everything else in business it also has its disadvantages, the executives from your company may not see eye to eye in certain decisions, therefore bringing internal conflicts within the company and causing the brand to loose strength or money, that’s why its very important to have all parties agree on certain agreements and regulations to commit to work as a unit for the brand and the company.

Question 2.
International Recognition in India: Eli Lilly was a name that most physicians in India did not recognize despite its leadership position in the United States, it did not have any recognition in India. In order to help the brand to be recognized in this country, executives decided to name the Joint Venture as Eli Lilly Ranbaxy.
Eli Lilly Ranbaxy gained trust and respect from Doctors, they fought the Indian Stigma of Unionized Pharmaceutical Industry: Eli Lilly’s biggest problem was the companies high turnover rate of jobs, because most employees belonged to a union it was hard for the company to maintain recent grads interested in pursuing a career with an unproven company, to remedy the situation, the company began to invest in training and used Lilly’s training programs, they costumed the programs for Indian conditions but retained Lilly’s values, they also made a conscious decision to promote within the company, within a year the venture began to earn the trust and respect of doctors, due to the strong values adhere by Lilly, it helped the