Strategic Value-Chain Analysis of Indian Pharmaceutical Alliances
2006
A number of firms around the world have been using
strategic alliancesto become more competitive globally. The reasons attributed to such
alliancesvary from
economiesof
scale, increased revenue,
cross selling, synergy, tax
write-offs, diversification and resource transfers among others. After the liberalization of Indian economy in 1991, Indian companies have used these
strategic alliancesto expand into other markets and prepare for increased competition at home. But after joining the World Trade Organization in 1995, India had to change its patent laws by 1 January 2005 to meet its commitments under the WTO's agreement on Trade Related Intellectual Property Rights (TRIPS). In the post-2005 scenario, the
pharmaceutical industryhas undergone a significant change due to the
TRIPS agreement. Though a number of reasons are attributed to these
strategic alliancesin literature, there is no particular pattern that can be observed in these
alliances. This study aims at analyzing the Indian
Pharmaceutical Industryand the
strategic alliancesin the recent past and what drives these
alliances. A
value chainframework has been proposed that analyses the critical capabilities needed along the
value chainin the
Pharmaceutical Industry, the existing capabilities of the firms and how these
alliancesare supposed to bridge the capability gap.
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