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Case Title:

The Indian Pharmaceutical Majors Ranbaxy and Orchid Alliance: A Win-Win Situation?

Publication Year : 2010

Authors: J Thadamalla, S Sakariya, K Suresh, D Parmar

Industry: Healthcare

Region:India

Case Code: SCJ0034IRC

Teaching Note: Not Available

Structured Assignment:  Available

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Abstract:
The competitive and fragmented Indian pharmaceutical market had multiple players but none had a sizable market share. Most leading Indian pharmaceutical companies had adopted mergers and acquisitions as a global growth and expansion strategy. Growth through acquisition was one of the strategies used by Ranbaxy to expand its business in emerging and profitable markets. On 22 April 2008, Ranbaxy controlled a 14.7% stake in Orchid from open market through its subsidiary, Solrex Pharmaceutical. Following the acquisition, Ranbaxy and Orchid entered into a long-term strategic business alliance to establish a framework for enhanced future co-operation between the two companies. The Ranbaxy - Orchid alliance included product development, manufacturing and marketing. With the help of core competencies on either side both the entities expected significant synergies through this alliance. But according to some industry analysts, Ranbaxy had cornered Orchid into an alliance and there were enough reasons for Ranbaxy to increase its stake in Orchid. They foresaw this as the beginning of a new wave of further consolidation in the Indian pharmaceutical Industry. Meanwhile, it needed to be seen, whether the Ranbaxy - Orchid strategic alliance could be a win-win situation for both.

Pedagogical Objectives:

    This case study aims at achieving the following pedagogical objectives:
  • To understand the dynamics, competition and consolidation in the Indian pharmaceutical industry.
  • To analyse the growth strategies of Ranbaxy.
  • To analyse the key factors that led to the Ranbaxy - Orchid alliance.
  • To understand strategic alliances as part of the business expansion strategy.

Keywords :  Indian pharmaceutical industry, Ranbaxy Laboratories, Orchid Chemicals and Pharmaceuticals, Strategic alliance, Growth strategy, Mergers and acquisitions, Market share, Market consolidation, Organic growth, Inorganic growth, Solrex Pharmaceutical, New product development, Manufacturing, Marketing, Global expansion, Competition

Contents : 
Consolidations in Indian Pharmaceutical Industry
Ranbaxy’s Growth Strategies
Ranbaxy’s Acquisitions 2006-2007
Ranbaxy-Orchid Alliance: A win-win Situation?
Growth Drivers of Indian Pharmaceutical Industry
India’s Top Ten Pharmaceutical Companies
Domestic Strategic alliances and Mergers

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