Strategic Management in Indian Pharmaceutical Industry

Abstract

Producing pharmaceuticals, i.e., a drug is a complex process. For an Active Pharmaceutical Ingredient (API), the manufacturer requires a reliable, supply of high quality raw materials, technical expertise and a stable supply of electricity, gas and other utilities, plus sufficient human resource capacity, scientists and pharmaceutical process/regulatory expertise. For the manufacturing of quality drugs, guidelines are fixed which are mandatory for each and every process. It is crucial that pharmaceutical manufacturing equipment complies with good manufacturing practices. The vast majority of the manufacturing cost is in the primary manufacturing of active ingredients, and the opportunity for smaller local manufacturers to save costs is limited; however, India has become a lucrative destination for clinical trials for global giants in the last few years. This study aims to analyze the Indian pharmaceutical industry and the strategic alliances in the recent past and what drives these alliances. An analysis of the critical capabilities needed along the value chain in the pharmaceutical industry, and the existing capabilities of the firms and how these alliances are supposed to bridge the capability gap, have been presented.