Case Study Description of Ranbaxy Laboratories Limited: Changing Aspirations
This case captures the roller-coaster ride of India's first multinational pharmaceutical company that after winning several accolades lost its way only to eventually plead guilty for the unethical practices it had resorted to in fulfilling its growth aspirations. Tracing the strategic choices of the company since its inception until it ceased to exist, the case covers the reign of several different CEOs. It enables examination of the drivers of a firm's strategic choices at the point of decision making, and serves to illustrate the dynamic aspects of leadership. Among others, it highlights the role of aspirations as a driver of firm's choices and the difficult tradeoffs that are inherent to aspiration-driven strategies. Demonstrating the negative repercussions of an aspiration-led strategy as well as the challenges a firm's leadership faces as they seek to re-define the aspirations, it serves as an intriguing story of the dark side of aspirations. The teaching note provides a set of discussion questions and pre-reads that can be assigned to the class, and suggests a detailed teaching plan that is divided into five pastures.
Swot Analysis of "Ranbaxy Laboratories Limited: Changing Aspirations" written by J Ramachandran, Snigdha Manukonda, Kiran Awate includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aspirations Aspiration facing as an external strategic factors. Some of the topics covered in Ranbaxy Laboratories Limited: Changing Aspirations case study are - Strategic Management Strategies, Leadership and Global Business.
Some of the macro environment factors that can be used to understand the Ranbaxy Laboratories Limited: Changing Aspirations casestudy better are - – digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing commodity prices, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Ranbaxy Laboratories Limited: Changing Aspirations
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ranbaxy Laboratories Limited: Changing Aspirations case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aspirations Aspiration, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aspirations Aspiration 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 Ranbaxy Laboratories Limited: Changing Aspirations can be done for the following purposes –
1. Strategic planning using facts provided in Ranbaxy Laboratories Limited: Changing Aspirations case study
2. Improving business portfolio management of Aspirations Aspiration
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aspirations Aspiration
Strengths Ranbaxy Laboratories Limited: Changing Aspirations | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aspirations Aspiration in Ranbaxy Laboratories Limited: Changing Aspirations Harvard Business Review case study are -
Ability to recruit top talent
– Aspirations Aspiration is one of the leading recruiters in the industry. Managers in the Ranbaxy Laboratories Limited: Changing Aspirations are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Aspirations Aspiration has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Ranbaxy Laboratories Limited: Changing Aspirations - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Aspirations Aspiration 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 Aspirations Aspiration is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ranbaxy Laboratories Limited: Changing Aspirations Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Aspirations Aspiration has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aspirations Aspiration 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.
Operational resilience
– The operational resilience strategy in the Ranbaxy Laboratories Limited: Changing Aspirations Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Aspirations Aspiration has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
High brand equity
– Aspirations Aspiration has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aspirations Aspiration to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Aspirations Aspiration 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 J Ramachandran, Snigdha Manukonda, Kiran Awate 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.
Sustainable margins compare to other players in Global Business industry
– Ranbaxy Laboratories Limited: Changing Aspirations firm has clearly differentiated products in the market place. This has enabled Aspirations Aspiration to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Aspirations Aspiration to invest into research and development (R&D) and innovation.
Training and development
– Aspirations Aspiration has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ranbaxy Laboratories Limited: Changing Aspirations 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.
Low bargaining power of suppliers
– Suppliers of Aspirations Aspiration in the sector have low bargaining power. Ranbaxy Laboratories Limited: Changing Aspirations has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aspirations Aspiration to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Aspirations Aspiration
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Aspirations Aspiration does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Ranbaxy Laboratories Limited: Changing Aspirations | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ranbaxy Laboratories Limited: Changing Aspirations are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ranbaxy Laboratories Limited: Changing Aspirations, in the dynamic environment Aspirations Aspiration has struggled to respond to the nimble upstart competition. Aspirations Aspiration has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Aspirations Aspiration has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Ranbaxy Laboratories Limited: Changing Aspirations has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Aspirations Aspiration 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ranbaxy Laboratories Limited: Changing Aspirations HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Aspirations Aspiration has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Ranbaxy Laboratories Limited: Changing Aspirations 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 Ranbaxy Laboratories Limited: Changing Aspirations can leverage the sales team experience to cultivate customer relationships as Aspirations Aspiration is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Aspirations Aspiration 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. Aspirations Aspiration 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Aspirations Aspiration is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ranbaxy Laboratories Limited: Changing Aspirations can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Ranbaxy Laboratories Limited: Changing Aspirations HBR case study mentions - Aspirations Aspiration takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Aspirations Aspiration 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.
No frontier risks strategy
– After analyzing the HBR case study Ranbaxy Laboratories Limited: Changing Aspirations, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of Aspirations Aspiration, firm in the HBR case study Ranbaxy Laboratories Limited: Changing Aspirations needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Ranbaxy Laboratories Limited: Changing Aspirations | 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 Ranbaxy Laboratories Limited: Changing Aspirations are -
Leveraging digital technologies
– Aspirations Aspiration can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aspirations Aspiration in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Buying journey improvements
– Aspirations Aspiration can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ranbaxy Laboratories Limited: Changing Aspirations suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Better consumer reach
– The expansion of the 5G network will help Aspirations Aspiration to increase its market reach. Aspirations Aspiration 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Aspirations Aspiration can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Aspirations Aspiration can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Aspirations Aspiration can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aspirations Aspiration 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, Ranbaxy Laboratories Limited: Changing Aspirations, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aspirations Aspiration is facing challenges because of the dominance of functional experts in the organization. Ranbaxy Laboratories Limited: Changing Aspirations 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Aspirations Aspiration 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Aspirations Aspiration can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Aspirations Aspiration can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Aspirations Aspiration has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Ranbaxy Laboratories Limited: Changing Aspirations - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aspirations Aspiration to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aspirations Aspiration can use these opportunities to build new business models that can help the communities that Aspirations Aspiration operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats Ranbaxy Laboratories Limited: Changing Aspirations External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ranbaxy Laboratories Limited: Changing Aspirations are -
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. Aspirations Aspiration needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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. Aspirations Aspiration 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.
Environmental challenges
– Aspirations Aspiration 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. Aspirations Aspiration can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aspirations Aspiration in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Aspirations Aspiration with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Aspirations Aspiration 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Aspirations Aspiration can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Aspirations Aspiration is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Aspirations Aspiration 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 Global Business industry regulations.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
Technology acceleration in Forth Industrial Revolution
– Aspirations Aspiration has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Aspirations Aspiration needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Aspirations Aspiration high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Ranbaxy Laboratories Limited: Changing Aspirations 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 Ranbaxy Laboratories Limited: Changing Aspirations 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 Ranbaxy Laboratories Limited: Changing Aspirations 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 Ranbaxy Laboratories Limited: Changing Aspirations 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 Ranbaxy Laboratories Limited: Changing Aspirations 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 Aspirations Aspiration needs to make to build a sustainable competitive advantage.