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...we mean, should Ranbaxy fear No.13?
‘India Inc. going global’ no more sounds astounding! And why should it, when on one hand India Inc. is firing all
cylinders, on the other, foreign money is flowing in like it never did! And so it has increased the appetite of hungry-forpower India Inc., which after shelling out a monumental $24.3 billion in buying out foreign companies during the first four months of 2007 alone is scouting greedily for more! Look at Ranbaxy which gobbled-up 13 skin-care brands from the stable of the renowned American pharmaceutical major Bristol-Myers Squibb (BMS) on May 28, 2007 at one go. While speaking on the deal, a Ranbaxy spokesperson told 4Ps B&M, “The acquisition will strengthen our dermatology range. Earlier we had one product but now we will have a wider range with a greater market penetration capability. Currently our plans are to market the products in high margin markets like USA, with no plans for India yet.”The acquisition is believed to have stemmed from Ranbaxy’s long term strategy of product portfolio expansion to garner a larger pie of the lucrative market of dermatology products. Renowned for its cost effective distribution channels, the acquisition is sure to propel Ranbaxy’s brand potential ahead, from the doldrums it seems to been in off late. It is estimated that the combined market value of the brands is close to $4.5 billion with sales hovering around $15 million.
However, Ranbaxy despite having paid a ‘lower than valued’ amount has to watch out as ‘all’ 13 brands come under the purlieu of ‘branded generic drugs’ – simply meaning that they either have already lost or will lose their patent shortly and then can be manufactured and marketed by all generic manufacturers. Hence, while the deal gives Ranbaxy a chance to get stronger in the dermatology drug market, it may have just placed its bet on a winning horse which has now gotten old! 4Ps
Edit bureau: Karan Mehrishi
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Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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