Eli Lilly Case Study
Was the country wrong? Why India?
No, India has a tremendous market because of the large number of its populations. For Lilly, there are large potential market share and profits in India. Also, India stimulated the foreign direct investment through increasing the maximum limit of foreign ownership from 40% to 51%.
Was deciding to partner wrong? Is partnership a good or bad thing?
No. Firstly, because of the maximum limit policy of foreign ownership, Lilly had to find a local company to cooperate. Secondly, because Lily have no ideas for the local market of India, and also there are some government regulations in drugs and pharmaceutical industry that Lilly might not be familiar with. In order to enter into Indian market quickly and efficiently, Lilly needed a partnership in Indian market.
Usually partnership creates internal conflicts. Because the companies from different backgrounds have different cultures, different strategies, different management styles. The conflicts were created during the daily operation and the decision making process. However, like the two companies in the case, both companies tried their best to cooperate so that they had successfully avoided and solved most of the problems and expanded their business.
Was the partner choice wrong?
No. Ranbaxy, a famous producer of drugs and pharmaceutical industry in India, was the leader of low-end products and traditional products, so that they can help Lilly to enter into Indian market, let customer be more familiar with the products of Lilly, and get the approvals and licenses from governments more easily, thus partnership with Ranbaxy is a good choice for Lilly.
Was the JV structure wrong?
No. Firstly Lilly had the technologies of high-end products and Ranbaxy held the dominated position and market