Elli Lilly

Case Study on ELILILLY IN INDIA: RETHINKING THE JOINT VENTURE STRATEGY

The Issues in the Case Study

“Does the JV has More Future”

The joint venture between both the companies has equally benefited their decision, It Managed to reach a breakeven after a tuff market situation and also made profit. It had built a strong culture & values but also maintained a great respect for each other. But with the change in the environment and laws in India, the JV needed a rethinking before going ahead.

Other issues in the case that relates to the problems are:

1. Both the companies had two different focuses over a period of time in the venture.

Lilly was more focused on research based products while Ranbaxy was more focusing on generics.

2. Weak Patent Laws in the country.

Due to weak patent laws in the country Lilly found it difficult to launch most of its product that could have proved success in the market.

3. The FDI investment from 51 % to 100 %.

With Government increasing the FDI investment to 100%, it made it easy for the foreign companies to have their own establishment in India and carry on their trade with the other Nations.

4. Signing Of with GAAT & WTO.

This brought a considerable amount of change in the Indian business environment, from the year 2005 India would grant product patent recognition to all new chemical entities. The foreign companies felt safe to launch their product.

Our Suggestions:

The Joint venture should end on a good terms,

This will assure a bright future to both the companies since their focus is on different line of business.

Ranbaxy is facing a financial burden and cash flow problems due to vast investment in the foreign market, selling of the shares in the joint venture will certainly help them to improve their financial condition. This a help them to concentrate on their core business of generis and also invest on the research based project to come with more better health medicines.

Lilly has already made a good foothold...