Transaction Economic

Zengxin（Alex） Chin

ID：11762032

Chapter 6 Case Study Assignment

1. Was the country wrong? Why India?

I don’t think it’s the wrong country they choose to expand in global market. Because the JV in India Eli Lily and Ranbaxy cooperated had many advantages in that time.

The first one is cheap labor. India had a great number of people and most of them were middle class which also means they would like to purchase the product as local customs.So, it’s also a huge market to aim.

Secondly, Ranbaxy is a big export pharmaceutical company         which might help Eli Lily expand into China and Russia.

Also, new brand influence will be better in Asia.

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

No, it’s not wrong to decide to be a partner. Because a local partner would help them manage local business and get into local market, Especially in a different country, like India, a developing countries and there was nothing known local as a big well-known company in U.S.

Partnership is not always a good or bad thing. If both of those companies effort to a same target and support each other. It’s great. Otherwise, they will face so many conflicts if each of them only care about themselves.

Was the partner choice wrong?

No, I don’t think so. We all know Ranbaxy was doing great in that time as a successful medical manufacturer in India. It was absolutely helpful for Eli Lily to start business in India. Also Ranbaxy control a large percentage of  medical export in India which can support Eli Lily in setting up a distribution network in Asia area.

Was the JV structure wrong?

I don’t think so. I think it’s a fantastic idea because Eli Lily was a successful pharmaceutical company in U.S. and known as it’s research and development. Ranbaxy is a totally different medical company which focus on domestic. They would help each other and support each other to improve the business in the same time, especially in Indian market.