The Country Was Not Wrong

1. Was the country wrong? Why India?

The country was not wrong. There are the following reasons. Firstly, Indian government began the process of economic reform since the dawn of the 1990s. Foreign direct investment was encouraged by increasing the maximum limit of foreign ownership to 51 % (from 40 %) in the drugs and pharmaceutical industry. Secondly, India has a large population. It implied that India had a huge market. If Lilly wanted to become a global company, she needed to build a greater presence in India and expand the potential opportunities to get profits. So India is a good choice.

2. Was deciding to partner wrong? Is partnership a good or bad thing?

Deciding to partner was not wrong. Ranbaxy was one of India's largest manufacturers of drugs, with a domestic market share of 15%. As a foreign company, Lilly could use Ranbaxy's reputation and goodwill to enter the Indian market. In addition, Lilly could also use Ranbaxy's huge distribution network. So in this case, each company utilized many advantages from other to develop the Indian market, and these two companies could share technology, profit and risk. I think the partnership with Ranbaxy was a good thing for Lilly.

3.Was the partner choice wrong?

No, the partner choice was not wrong. Eli Lilly and Ranbaxy had a lot in common, and Lilly could use Ranbaxy's knowledge and distribution network to get its feet on the ground in India. Maybe there was a better choice, but the partnership with Ranbaxy was not a wrong choice.

4. Was the JV structure wrong?

The JV structure was not wrong. These two companies all want to become global company. So they should use each other's resources. In this JV structure, Lilly obtained 50 % of shareholding and Ranbaxy obtained the other 50 %, they had equal equity ownership. And each