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 - – increasing household debt because of falling income levels, technology disruption, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, there is backlash against globalization, increasing commodity prices,
there is increasing trade war between United States & China, wage bills are increasing, 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 -
Strong track record of project management
– Aspirations Aspiration is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Aspirations Aspiration digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aspirations Aspiration has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
Highly skilled collaborators
– Aspirations Aspiration 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 Ranbaxy Laboratories Limited: Changing Aspirations 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 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.
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.
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.
Superior customer experience
– The customer experience strategy of Aspirations Aspiration in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Aspirations Aspiration are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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 -
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.
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 Aspirations Aspiration supply chain. Even after few cautionary changes mentioned in the HBR case study - Ranbaxy Laboratories Limited: Changing Aspirations, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aspirations Aspiration vulnerable to further global disruptions in South East Asia.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Aspirations Aspiration is dominated by functional specialists. It is not different from other players in the Global Business segment. Aspirations Aspiration needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aspirations Aspiration to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, J Ramachandran, Snigdha Manukonda, Kiran Awate suggests that, Aspirations Aspiration 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.
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.
High cash cycle compare to competitors
Aspirations Aspiration has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ranbaxy Laboratories Limited: Changing Aspirations, it seems that the employees of Aspirations Aspiration 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.
Need for greater diversity
– Aspirations Aspiration has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
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 -
Learning at scale
– Online learning technologies has now opened space for Aspirations Aspiration 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.
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.
Building a culture of innovation
– managers at Aspirations Aspiration can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
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.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Aspirations Aspiration 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 Aspirations Aspiration to hire the very best people irrespective of their geographical location.
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.
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.
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.
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 Aspirations Aspiration 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.
Manufacturing automation
– Aspirations Aspiration can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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 -
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.
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.
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 Aspirations Aspiration.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ranbaxy Laboratories Limited: Changing Aspirations, Aspirations Aspiration may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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.
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 Aspirations Aspiration business can come under increasing regulations regarding data privacy, data security, 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 Aspirations Aspiration in the Global Business sector and impact the bottomline of the organization.
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.
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.
Increasing wage structure of Aspirations Aspiration
– 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 Aspirations Aspiration.
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.
