For that reason, I believe that even if 100% ownership had been allowed, Eli Lilly should have still entered India as a joint venture in order to minimize risk. Eli Lilly was a recognized brand United States. However, that was not the case in India. Ranbaxy was the leader company within in India, which gave competitive advantage to the Eli Lilly Ranbaxy JV. After reviewing the case, I feel that without the facilitation of the Joint venture, Eli Lilly may not have been as successful operating in the India market.
Higher capital investment would have been necessary, which in return would have meant higher risk of loss and a lot more time before reaching the break-even point. The Eli Lilly Ranbaxy joint venture allowed Eli Lilly to acquire brand recognition, establish a corporate culture, facilitated distribution and government procedures, minimized errors, and lessened risk. The case recalled Gulati: “We used Ranbaxy’s name for everything. We were new and it was very difficult for us…” which heavily reflects the advantages of the joint venture with Ranbaxy.
Such factors had a great influence in the success of the Eli Lilly’s company in India, which is why I believe that Eli Lilly pursued the right strategy to enter the Indian market. Question No. 2 First, the biggest achievement that Eli Lilly had in the Joint venture was the successful entry into the Indian market. Before the joint venture, Eli Lilly had direct operations in the Indian market, no distribution channels, and no name recognition. However, the joint venture gave Eli Lilly a toehold in India; it allowed the company to become a big player in pharmaceutical industry in India.
The Essay on Eli Lilly In India: Rethinking The Joint Venture Strategy
In 1993 Eli Lilly, one of the leading pharmaceutical firms in the USA, started a joint venture in India with the leading Indian company Ranbaxy. The decision ... challenge to the two leading pharmaceutical companies, Eli Lilly and Ranbaxy, to review and re-evaluate their joint venture alliance. What was happening on the ...
Second, the joint venture allowed both companies to establish an exceptional corporate culture and a high caliber, non-unionized sales force with world-class sales process. The strong values adhered to by Eli Lilly Ranbaxy and strategic sales process is what gave them a competitive advantage among the Indian Market, doctors trusted and respected the Eli Lilly Ranbaxy products because of the associated ethical conduct of the company. Third, Eli Lilly was able establish brand recognition, which then allowed them to build regulatory a foundation in India.
When Eli Lilly started operating in India, they had to use Ranbaxy’s name in order to facilitate the process, however, the joint venture gave the company the tools needed to become a trusted brand. Eli Lilly is now able to stand alone and work together with the government on regulatory issues. Fourth, Eli Lilly acquired medical infrastructure and expertise to run clinical trials to internationals standards. In 1992, before the venture was arranged, Lilly had interest in using the world for clinical testing, and it is now that it can begin moving forward faster and attempt to shape opinion with leaders in the medical field around the world.
