A

Report

On

Pharmaceutical

Submitted to,

Dr. Jayshree Siddhapuria

Subject: -

Entrepreneurship

Submitted by,

Panwala Monil C.

Enrollment no.: 187500592072

DIV: B1

MBA SEMESTER II (2018-19)

Thaker Hasit S.

Enrollment no.: 187500592113

DIV: B1

MBA SEMESTER II (2018-19)

 Industry: -Pharmaceutical
Entrepreneur: -Dilip Shanghvi

Dilip Shanghvi (born 1 October 1955) is an Indian billionaire businessman and

one of the country's richest people. He founded Sun Pharmaceuticals.
The Government of India awarded him the civilian honour of the Padma Shri in
2016. India Today magazine ranked him 8th in India's most powerful people of
2017 list.
Dilip Shanghvi hails from a Gujarati Jain family, who was born in the small town
of Amreli in Gujarat to Shantilal Sanghvi and Kumud Sanghvi. Shanghvi earned
a Bachelor of Commerce degree from the University of Calcutta.
Career
He started by helping his father in his wholesale generic drugs business
in Kolkata. It was during this work that he thought of manufacturing his own
drugs instead of selling others' products.
Shanghvi started Sun Pharmaceutical Industries with capital of INR 10,000 in
1982 at Vapi, with one psychiatry drug. In 1997, Sun acquired Caraco Pharma, a
loss-making American company, with the aim of expanding Sun's reach in the
United States. Sun also acquired Israel's Taro Pharma in 2007. Shanghvi stepped
down as chairman and CEO in 2012 and chose Israel Makov, formerly CEO
of Teva Pharmaceuticals, as his successor; Shangvi became managing director.
In April 2014 Sun, Ranbaxy, and Daiichi Sankyo (the majority shareholder in
Ranbaxy) agreed that Sun would acquire all outstanding shares of Ranbaxy for
$3.2billion in Sun stock and that Sun would take on $800M in Ranbaxy debt; the
deal closed in March 2015 and made Sun the largest drug company in India and
fifth largest in the world, and made Daiichi the second largest shareholder in Sun.
VISION of Sun Pharma
Reaching People and Touching Lives Globally as a Leading Provider of
Valued Medicines.

Values of Sun Pharma

Quality
 Get it right the first time.
Reliability
 Maintain efficiency & discipline in all processes & systems and fulfil the
promises made to stakeholders.
Consistency
 Endeavour to bring new products to the market & consistently deliver value
to stakeholders.
Trust
 Be transparent in dealings.
Innovation
 Implement new ideas & technologies to meet unmet needs and think ahead
of times.

Problem Faced by Sun pharma

There are reputational risks

It will be a challenging ride for Sun Pharmaceutical Industries Ltd to align Ranbaxy
Laboratories Ltd with its business given the regulatory hurdles and cultural
differences.
The reputation which Dilip Shanghvi, founder and managing director of Sun
Pharma, has earned for turning around distressed businesses will once again be put
to test. The investor community will be closely watching each and every move he
makes in order to integrate Ranbaxy with Sun Pharma.
Regulatory hurdles posed by the US food and drug administration are hampering
production at Ranbaxy and are a key challenge that Sun Pharma will have to
overcome. The acquirer is not yet anticipating any obstacles that may be posed by
competition regulator, the Competition Commission of India.
Aligning goals and market focus will also require attention. The two
companies operate across different geographies and their objectives may differ. The
synergies get difficult to extract. Procedures and technology have to be integrated.
Both companies are Indian but, still, no two firms have the same genetic make-up.
There are reputational risks as well. It is not clear if Sun Pharma would retain the
Ranbaxy brand in a full-fledged manner. But Sun Pharma is likely to emerge as the
dominant brand.

Acquisition will be a challenge

Ranbaxy Laboratories Ltd has always faced quality and people challenges.
The major challenge Dilip Shanghvi (Sun Pharmaceutical Industries Ltd founder
and managing director) will face would be in dealing with the US Food and Drug
Administration (FDA) and imposing the confidence required in Ranbaxy’s
quality control processes. Shanghvi’s Sun Pharma, being an Indian company, will
face a tough challenge in this direction, for FDA would have perceived the
Japanese (Ranbaxy’s current parent Daiichi Sankyo) more favourably as they are
known for introducing better quality standards. It also remains to be seen how it
would be able to clean up the culture in Ranbaxy to one which inculcates a much
more stringent quality process.
Another challenge which Shanghvi will face will be to integrate the two
companies after the deal. Since Ranbaxy is a fairly large firm, its post-merger
integration with Sun Pharma will pose a significant challenge. Such an integration
is quite easy in deals where a large company is taking over a small company or
vice-versa. But since both Ranbaxy and Sun Pharma are quite large in terms of
market capitalization, integration is going to be quite a challenge.
Synergies from the deal can only be realized when these companies get
well-integrated into each other. There can be two kinds of synergies. One could
be product synergy: there could be some therapeutic segments where Sun Pharma
is strong while Ranbaxy could be strong in other areas. Similarly, there could be
some geographical synergies as well: for instance, Ranbaxy is struggling in the
US and Sun Pharma’s ground presence in that country could prove to be useful.
Sun Pharma has been able to manage its past acquisitions reasonably well, but
this acquisition is going to be quite a challenge.

INNOVATION

Integrating well is the key

Challenges become opportunities after acquisitions; it depends on the way
you look at it. It requires efficient integration of IT infrastructure, systems,
operations, manufacturing, client integration and the most important is people
integration. It is one thing to do technology integration and to integrate people
effectively is another. Technology, manufacturing are all tangible, but the most
important and soft issue is integrating people, culture and leadership effectively, as
most fail to realize the fullest potential and essence of the synergies they could have
got from a good cultural integration.
When two equals come into play and the opportunity in the market is double,
I do not think there should be a lot of cost-cutting and rationalizing. The companies
could recognize the overlapping operation and the workforce as an investment
potential, and focus on building the top line (revenue) in the initial years. However,
some immediate rationalization at the top level could be seen, if they don’t see much
potential of growth in the new entity.
The pharma industry has its own set of challenges, and regulatory hurdles are
the biggest challenge. It will be crucial to see how this pans out. As some years ago,
an American multinational had acquired a medical systems company and could not
integrate it in the right way and had to spin it off, only to acquire it again after a few
years at a higher valuation. An aspiration to acquire is just a starting point, which
many get it right, but integrating it well is the key.

PESTEL Analysis of Sun Pharma

Political Factors that Impact Sun Pharma

1) Governance System – The present governance system in India has served its
purpose for the long time and I don’t think much will change in the process even
though it may throw up leaders that can lead divergent policy making from the
historical norm. Sun Pharma has to keep a close eye on the industry wide
government priorities to predict trends.

2) Government of India has come under increasing global pressures to adhere to

World Trade Organization’s regulations on Biotechnology & Drugs industry.

3) Taxation policies – Over the last two decades Sun Pharma has benefitted from
lower taxation policies throughout the western hemisphere. It has resulted in high
profits and increasing spending in the research and development. The increasing
inequality in India can lead to changes in the taxation policies. Secondly local
governments are also looking into Biotechnology & Drugs specific taxation
policies to contain the carbon footprint of the Healthcare sector.

4) Importance of local governments in India – Unlike in most other countries,

local governments play critical role in policy making and regulations in India.
Sun Pharma has to closely follow the states and territories it has presence in rather
than devising nation-wide policies in India.

5) Other stakeholders such as non-government organizations, protest & pressure

groups, activist movements play critical role in policy making in India. Sun
Pharma should closely collaborate with these organizations so that it can
contribute better to the community goals as well as with corporate goals.

6) Regulatory Practices – Sun Pharma has to manage diverse regulations in the

various markets it is present in. Over the last few years India and other emerging
economies have changed regulations regarding not only market entry but also
how companies in Biotechnology & Drugs can operate in the local market.

Economic Factors that Impact Sun Pharma

1) Increasing liberalization of trade policy of India can help Sun Pharma to invest
further into the regions which are so far off-limits to the firm.

2) Government intervention in the Healthcare sector and in particular

Biotechnology & Drugs industry can impact the fortunes of the Sun Pharma in
the India.
3) Efficiency of financial markets in India – Sun Pharma can access vibrant
financial markets and easy availability of liquidity in the equity market of India
to expand further globally.

4) Availability of core infrastructure in India – Over the years India government

has increased the investment in developing core infrastructure to facilitate and
improve business environment. Sun Pharma can access the present infrastructure
to drive growth in sector name sector in India.

5) Economic Performance of India – I believe the economic performance of India

in the near future 5-10 years will remain stable given – government expenditure,
stable demand because of disposable income, and increasing investment into new
industries.

6) Exchange rate – The volatile exchange rate of India can impact Sun Pharma
investment plans not only in the short term but also in the long run.

Social Factors that Impact Sun Pharma

1) Migration – The broader attitude towards migration is negative in India. This

can impact Sun Pharma ability to bring international leaders and managers to
manage operations in the country.

2) Leisure interests – the customers in the India are giving higher preferences to
experiential products rather than traditional value proposition in Healthcare
sector. Sun Pharma can leverage this trend to build products that provide
enhanced customer experience.

3) Access to essential services – By and large over the last decade and half the
wider population in getting access to essential services in India. This has been a
result of increasing investment in public services.

4) Power structure – There is an increasing trend of income inequality in India.

This has altered the power structure that has been persistent in the society for over
last 6-7 decades.
5) Attitude towards health and safety – With increasing liberalization the attitude
towards health and safety are getting lax. Sun Pharma needs to stay away from
these attitudes as the cost of failure is too high in India.

6) Education level – The education level is high in India especially in the Sun
Pharma sector. Sun Pharma can leverage it to expand its presence in India.

Technological Factors that Impact Sun Pharma

1) Developments and dissemination of mobile technology has transformed

customer expectations in the Healthcare sector. Sun Pharma has to not only meet
and manage these expectations but also have to innovate to stay ahead of the
competition.

2) Intellectual property rights and patents protection – If India have higher

safeguards for IPR and other intellectual property rights then more and more
players are likely to invest into research and development.

3) 5G and its potential – Sun Pharma has to keep a close eye on the development
and enhancement of user experience with increasing speed and access. This can
completely transform the customer user experience in the Biotechnology & Drugs
industry.

4) Empowerment of supply chain partners – Technology has shortened the

product life cycle and it has enabled suppliers to quickly develop new products.
This has put pressure on Sun Pharma marketing department to keep the suppliers
happy by promoting diverse range of products. It has added to the cost of
operations of the Sun Pharma.

5) Lowering cost of production – The latest technology is fast lowering

production and servicing cost in the Healthcare sector. Sun Pharma has to
restructure its supply chain to bring in more flexibility to meet both customer
needs and cost structures.

6) Research and development investment at both macro level and micro level in
India. If there is an environment of creative disruption and both government and
private players are spending resources on developing new solutions.
Environmental Factors that Impact Sun Pharma

1) Paris Climate Agreement has put real targets for the national government of
India to adhere to. This can result in greater scrutiny of environmental standards
for Sun Pharma in India.

2) Regular scrutiny by environmental agencies is also adding to the cost of

operations of the Sun Pharma.

3) Renewable technology is also another interesting area for Sun Pharma. It can
leverage the trends in this sector. India is providing subsidies to invest in the
renewable sector.

4) Recycling is fast emerging as a norm rather than a good thing to do in India

economy. Sun Pharma has to make plans to adhere to regulations and
expectations in the Healthcare sector.

5) Waste management especially for units close to the urban cities has taken
increasing importance for players such as Sun Pharma. India government has
come up with strict norms for waste management in the urban areas.

6) Environmental norms are also altering the priorities of product innovation. In

many cases products are designed based on environmental standards and
expectations rather than catering to traditional value propositions.

Legal Factors that Impact Sun Pharma

1) Health and safety norms in the India and what Sun Pharma need to do to meet
those norms and what will be the cost of meeting those norms.

2) Data protection laws – Over the last decade data protection has emerged as
critical part of not only privacy issues but also intellectual property rights. Sun
Pharma has to consider whether India have a robust mechanism to protect against
data breaches or not.

3) Time take for business cases in court – some countries even though follow
international norms but the time for resolution often run in years. Sun Pharma has
to carefully consider average time of specific cases before entering an
international market.

4) Environment Laws and guides – The level of environmental laws in the India
and what Sun Pharma needs to do to meet those laws and regulations.

5) Employment law in the India and how they are impacting the business model
of the Biotechnology & Drugs. Can these conditions be replicated or bettered in
international market?

6) Business Laws – The business laws procedure that India follows. Are these
norms consistent with international institutions such as World Trading
Organization, European Union etc.

SWOT Analysis
Strengths
1) Strong growth in emerging market business.
2) Introduction to Pantoprazole & Eloxatin in US market has very limited
competition.
3) They have strong marketing and sales force of over 12000 employees.
4) They have successfully acquired Taro pharma which has further
consolidated their position in Indian markets.
5) Strong brand presence in India and US markets.

Weakness
1) Stiff competition from many Indian and other global brands means limited
market share growth.
2) Limited presence in emerging market and European countries.

Opportunity
1) They can leverage their acquisition to further increase the growth.
2) They can increase their presence in contract manufacturing.
3) Increasing healthcare awareness in India.
Threats
1) There is growing competition in generic market.
2) Stringent patent regulations.
3) High price sensitivity of consumers.

BUSINESS PLAN: -

1. INSRTUCTIONS: - Executive Summary

 Our business plan is related to generic medicines.
 To buy the generic medicine from the manufacturer and sell it to the
retailer.

Service: -
Our business service is we buy the generic medicine from the
manufacturer.

Problem: -
We are solving the problem of expensive medicine which common
people have problems in buying.

Target Market: -
Our target consumers are middle-class family and lower middle-
class family.

Competitors: -
Our competitors will be the local medicine stores which are
providing 25% to 30% discount on all medicine.
  Financial outlook: -

INCOME AMT. EXPENSES AMT.

(Rs.) (Rs.)
Balance brought down 5000 Company registration 3000
Generic Medicine sales to retailer 6000 Manufacturer 4000
Sale to individual customers 2000

Tax (35%) 1500

Profit 4500
Total 13000 Total 13000

2. Company description: -

PARTICULAR PARTICULAR

NAME OF THE APPLICANT H & M Pvt. Ltd.

EMAIL ID. htmp@GMAIL.COM

CITY SURAT

DATE OF APPLICATION 08-04-2019

SECTOR Pharmaceutical

TYPE OF FIRM Partnership

 We are MBA student; we are starting a business of selling of generic medicine.

 Ours company name is H & M Pvt. Ltd.; owners of company are Hasit Thaker
and Monil Panwala.
 Ours target customer is that people who are from middle-class and lower-middle
class who are not able to buy the expensive medicines.
References: -

www.sunpharma.com

www.brandindiapharma.in

q1medicare.com

en.wikipidea.org