Eli Lilly in India: Rethinking the Joint Venture Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Eli Lilly in India: Rethinking the Joint Venture Strategy
Eli Lilly and Company is a leading U.S. pharmaceutical company. The new president of intercontinental operations was re-evaluating all of the company's divisions, including the joint venture with Ranbaxy Laboratories Limited, one of India's largest pharmaceutical companies. This joint venture had run smoothly for a number of years despite their difference in focus, but recently Ranbaxy had been experiencing cash flow difficulties due to its network of international sales. In addition, the Indian government was changing regulations for businesses in India, and joining the World Trade Organization would have an effect on India's chemical and drug regulations. The president must determine if this international joint venture still fits Eli Lilly's strategic objectives.
Authors :: Charles Dhanaraj, Paul W. Beamish, Nikhil Celly
Swot Analysis of "Eli Lilly in India: Rethinking the Joint Venture Strategy" written by Charles Dhanaraj, Paul W. Beamish, Nikhil Celly includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Eli Ranbaxy facing as an external strategic factors. Some of the topics covered in Eli Lilly in India: Rethinking the Joint Venture Strategy case study are - Strategic Management Strategies, Emerging markets, Joint ventures and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Eli Lilly in India: Rethinking the Joint Venture Strategy casestudy better are - – increasing energy prices, central banks are concerned over increasing inflation, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic ,
geopolitical disruptions, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Eli Lilly in India: Rethinking the Joint Venture Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Eli Lilly in India: Rethinking the Joint Venture Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eli Ranbaxy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eli Ranbaxy operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Eli Lilly in India: Rethinking the Joint Venture Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Eli Lilly in India: Rethinking the Joint Venture Strategy case study
2. Improving business portfolio management of Eli Ranbaxy
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Eli Ranbaxy
Strengths Eli Lilly in India: Rethinking the Joint Venture Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eli Ranbaxy in Eli Lilly in India: Rethinking the Joint Venture Strategy Harvard Business Review case study are -
High brand equity
– Eli Ranbaxy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Eli Ranbaxy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Eli Ranbaxy
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Eli Ranbaxy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Eli Ranbaxy is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Eli Ranbaxy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Eli Ranbaxy is present in almost all the verticals within the industry. This has provided firm in Eli Lilly in India: Rethinking the Joint Venture Strategy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to recruit top talent
– Eli Ranbaxy is one of the leading recruiters in the industry. Managers in the Eli Lilly in India: Rethinking the Joint Venture Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Eli Ranbaxy is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Charles Dhanaraj, Paul W. Beamish, Nikhil Celly can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Highly skilled collaborators
– Eli Ranbaxy has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Eli Lilly in India: Rethinking the Joint Venture Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Eli Ranbaxy in the sector have low bargaining power. Eli Lilly in India: Rethinking the Joint Venture Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Eli Ranbaxy to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Eli Ranbaxy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Eli Ranbaxy has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Superior customer experience
– The customer experience strategy of Eli Ranbaxy in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Eli Ranbaxy has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Eli Lilly in India: Rethinking the Joint Venture Strategy Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Eli Ranbaxy is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Eli Ranbaxy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Eli Lilly in India: Rethinking the Joint Venture Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Eli Lilly in India: Rethinking the Joint Venture Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Eli Lilly in India: Rethinking the Joint Venture Strategy are -
Interest costs
– Compare to the competition, Eli Ranbaxy has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Eli Ranbaxy has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Charles Dhanaraj, Paul W. Beamish, Nikhil Celly suggests that, Eli Ranbaxy is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Eli Lilly in India: Rethinking the Joint Venture Strategy, it seems that the employees of Eli Ranbaxy don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Lack of clear differentiation of Eli Ranbaxy products
– To increase the profitability and margins on the products, Eli Ranbaxy needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Eli Ranbaxy, firm in the HBR case study Eli Lilly in India: Rethinking the Joint Venture Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Eli Ranbaxy supply chain. Even after few cautionary changes mentioned in the HBR case study - Eli Lilly in India: Rethinking the Joint Venture Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Eli Ranbaxy vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Eli Lilly in India: Rethinking the Joint Venture Strategy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Eli Lilly in India: Rethinking the Joint Venture Strategy can leverage the sales team experience to cultivate customer relationships as Eli Ranbaxy is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Eli Ranbaxy is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Eli Lilly in India: Rethinking the Joint Venture Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Eli Lilly in India: Rethinking the Joint Venture Strategy, is just above the industry average. Eli Ranbaxy needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow decision making process
– As mentioned earlier in the report, Eli Ranbaxy has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Eli Ranbaxy even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities Eli Lilly in India: Rethinking the Joint Venture Strategy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Eli Lilly in India: Rethinking the Joint Venture Strategy are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Eli Ranbaxy can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Eli Ranbaxy has opened avenues for new revenue streams for the organization in the industry. This can help Eli Ranbaxy to build a more holistic ecosystem as suggested in the Eli Lilly in India: Rethinking the Joint Venture Strategy case study. Eli Ranbaxy can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Eli Ranbaxy to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Low interest rates
– Even though inflation is raising its head in most developed economies, Eli Ranbaxy can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Eli Ranbaxy can use these opportunities to build new business models that can help the communities that Eli Ranbaxy operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Eli Ranbaxy is facing challenges because of the dominance of functional experts in the organization. Eli Lilly in India: Rethinking the Joint Venture Strategy case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Eli Ranbaxy to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Eli Ranbaxy to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Eli Ranbaxy has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Eli Ranbaxy can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Eli Ranbaxy in the consumer business. Now Eli Ranbaxy can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Eli Ranbaxy to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Eli Ranbaxy can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Eli Lilly in India: Rethinking the Joint Venture Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Eli Ranbaxy to increase its market reach. Eli Ranbaxy will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Eli Lilly in India: Rethinking the Joint Venture Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Eli Lilly in India: Rethinking the Joint Venture Strategy are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Eli Ranbaxy can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Eli Lilly in India: Rethinking the Joint Venture Strategy .
Regulatory challenges
– Eli Ranbaxy needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Eli Ranbaxy needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Eli Ranbaxy needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Eli Ranbaxy can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Eli Ranbaxy business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Eli Ranbaxy is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Eli Ranbaxy in the Strategy & Execution sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Eli Ranbaxy.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Eli Ranbaxy will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Eli Ranbaxy with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Eli Ranbaxy
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Eli Ranbaxy.
Stagnating economy with rate increase
– Eli Ranbaxy can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Eli Lilly in India: Rethinking the Joint Venture Strategy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Eli Lilly in India: Rethinking the Joint Venture Strategy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Eli Lilly in India: Rethinking the Joint Venture Strategy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Eli Lilly in India: Rethinking the Joint Venture Strategy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Eli Lilly in India: Rethinking the Joint Venture Strategy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Eli Ranbaxy needs to make to build a sustainable competitive advantage.
