International Strategy and Structure

An Analysis

Dr. Reddys

International Business Individual Assignment

Dishank Doshi
14047

Batch: 2014-16

1/12/2014

About the company

Dr. Reddy's Laboratories Ltd, is a pharmaceutical company based in Hyderabad, Telangana, India. The company
was founded by Anji Reddy, who had previously worked in the mentor institute, Indian Drugs and Pharmaceuticals
Limited, of Hyderabad, India.[1] Dr. Reddy's manufactures and markets a wide range of pharmaceuticals in India
and overseas. The company has over 190 medications, 60 active pharmaceutical ingredients (APIs) for drug
manufacture, diagnostic kits, critical care, and biotechnology products. Within a year, Reddy's became the first
Indian company to export the active ingredients for pharmaceuticals to Europe. In 1987, Reddy's started to
transform itself from a supplier of pharmaceutical ingredients to other manufacturers into a manufacturer of
pharmaceutical products.
Vision: To become a discovery ruled global pharmaceutical company with a core purpose of helping people lead
healthier lives. Mission: To be first Indian Pharmaceutical company that successfully takes its products from
discovery to commercial launch globally. :
Mission: To be first Indian Pharmaceutical company that successfully takes its products from discovery to
commercial launch globally.
Values
Our patients trust our medicines and we believe that this trust must be earned every single day. We continually
remind ourselves that the interests of our patients must always come first. In pursuit of this, we believe in creating
an environment of innovation and learning, as we push ourselves to reach higher levels of excellence.

Integrity and Transparency: We will uphold the highest standards of integrity and transparency in all our
interactions.

Safety: We are committed to providing safe working environments through continuous improvement of our
infrastructure, work practices and behaviors.

Quality: We are dedicated to designing quality into our products and processes to delight our stakeholders.

Productivity: We strive to achieve more with less through a culture of innovation, continuous improvement
and a sustained focus on elimination of waste.

Respect for the Individual: We are committed to providing a work environment that encourages diverse
perspectives and upholds the dignity of work and of individuals.

Collaboration and Teamwork: We will leverage expertise and resources from across our global network
to create greater value for our stakeholders.

Sustainability: We will create value for all our stakeholders in a manner that respects our natural
environment and serves the best interest of the communities in which we live and work.

Company History
1984: Anji Reddy quits state-owned Indian Drugs & Pharmaceuticals (IDPl) to start DRl with ~25 lakh corpus.
1986: DRl goes public and enters international markets with methyldopa exports after lDPL stops producing
drug owing to technical reasons.
1987: Becomes first Indian company to make its plant USFDA compliant, thus marking oRL's foray into the
world of generics.
1991: Among early Indian companies to enter Russia, but opts for private pharmacies rather than traditional
government route.
1997: Licenses anti-diabetic molecule (Balaglitazone) to Novo I Nordisk. validating Anji's belief that research
is the future of pharma.
1999: Acquisition of American Remedies catapults DRl as the 5th largest Indian pharma company.
2001: First Asia-Pacific (ex-Japan) entity to list on NYSE, helping DRl not just raise money but also improve
transparency. Wins first patent challenge with lSO-day marketing exclusivity for generic drug (Fluoxetine 40
mg) in the US, giving DRl confidence to build first-to-file pipeline and ushers in an era of patent challenges.
2005: Acquisition of Roche's API business in Mexico helps DRL turn suppliers to innovators, a difficult market
to crack until then.
2006: Crosses $1 billion in revenues with the acquisition of Betapharm in Germany, but change in regulations
make acquisition unviable.
2007: ORl sees biosimilars as a growth area, launches Reditux (Rituximab), the world's first monoclonal
antibody biosimilar. Reditux goes on to be a market leader in its segment.
2008: Post setback in research, DRL decides to acquire technology platforms to strengthen R&D capabilities.
Acquires Dow Pharma's small molecules business in the UK.
2009: Strategic alliance with GSK for 100 products in emerging markets validates strength ot' product portfolio
and manufacturing capabilities.
2011: Achieves critical size as revenues cross $2 billion, helping DRl take larger bets in product development.
2012: Strengthens capabilities in injectable and biosimilar through acquisitions and builds an impressive
product portfolio in each of its businesses following a deal with Merck Serono and acquisition of Octoplus.
ANALYSIS OF THE GLOBAL SCENARIO
Globally, pharmaceutical industry grew at a compounded annual growth rate of 9.1
per cent in the last 23 years to $491 billion. Mergers and acquisitions reshapedmultinationals.
Factors affecting the pharmaceutical industry:
1.Government Regulations
-drug prices, FDA regulations, sales & marketing practices-2.

Loss of Patent Protection

- patent expiration, biogenerics, legal attack of patentvalidity, patent law reform, health crises. Patent expiration is
no longer the only threatto patent protection.3.
Industry Player Environment
-outsourcing, M&A, spin-outs, future industrystructure. A churning of pharma industry players will continue
as both large and smallcompanies fight for survival.4.
New Product Development
- R&D, poor quality drug candidates, slow production of novel drug discovery technology5. Socio-economic
Trends -- greater end-user involvement, threat of bioterrorism, epidemiology, DTC advertising &
customer confidence, employment, stock market performance, worldwide market
GLOBAL STRATEGY OF DR. REDDY LABORATERIES
Create value by transferring valuable core competencies to foreign markets that indigenous competitors
lack
maximum local responsiveness
Customize product offering, market strategy including production and R&D according to national
conditions
achieve a low cost product by reaping cost reductions that come from experience curve effects and location
economies
Market standardized product to keep costs low
reduce costs, transfer core competencies while paying attention to pressures for local responsiveness
Geographical expansion

ENTRY DECESION
Managing the product life cycle
Geographic expansion as a growth strategy
Technology advantage
Building a corporate image
Incentives and business impact
Lobour advantage

New business opportunities

Growing Russian pharmaceutical market
Untapped market
Government policies

Proactive Reasons
Profit Advantage
Unique products
Unexplored/ under-penetrated market
Market Size
Technological Advantage
Economies of scale
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