This article is regarding the stakes increment by UK based GlaxoSmithKline (GSK) in its Indian subsidiary (GSK Pharmaceutical Ltd) from 50.7% to 75%, despite the volatile regulatory environment relating to the pricing control of drugs and tension over patents issues (Ward 2014). The implementation of new price controls is also likely to result in smaller profit margin. However, the increased in stakes for GSK India signifies the confidence of GSK in the Indian market, the need for greater control and the intention to focus in the emerging market. GSK is positive that the progressive rise in expenditure will outweigh the price restrictions (Ward 2014).
Application of concepts
India has a Mixed Market Economy structure whereby the government’s intervention is active but economy functions predominantly on market forces (Morrison 2011). The government had recently used interest rates – the monetary tool as an instrument to tackle high inflation and stimulate economic growth (Times of India 2014). However, as businesses are sensitive towards the directional change in interest rates, an increase in interest rates would lead to increase in financial burden for GSK India (Park 2013).
Pharmaceutical industry primarily falls under Creative Change in the Trajectories of Industry Changes since core assets of the businesses such as resource, knowledge and brand capital are constantly under challenge (McGahan 2004).
However, one prolonged issue that exist in India is the controversies relating to the Intellectual Property (IP) rights. In 2005, the Patent Reform in India changed the IP regulations from 7-years Process Patent, to match the Trade Related Aspect of Intellectual Property Rights (TRIPS) compliant IP rights of 20-years Product Paten...
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...ivers no surprises, holds interest rates’, Times of India, 01 April, viewed 02 April 2014,
Tripathi, S. 2007, ‘India’s Growth Path Steady but not Straight’, Issues in Science and Technology, vol. 23, no. 3, pp. 63-72, viewed 01 April 2014, ProQuest Central, 195926331.
Tyagi, A. and Gupta, N. 2012, ‘Corporate Social Responsibility [CSR] – Issues and Challenges in India’, International Journal of Management Research and Reviews, vol. 2, no. 9, pp. 1656-1667, viewed 02 April 2014, ProQuest Central, 1432297216.
Ward, A. 2014, ‘GlaxoSmithKline raises stake in Indian subsidiary to 75%’, Financial Times, 10 March, viewed 20 March 2014,
According to Brand India Equity Foundation, the Indian pharmaceutical market is likely to grow at a compound annual growth rate (CAGR) of 14-17 per cent in between...
An Analysis of GlaxoSmithKline The business that I have done research into is GlaxoSmithKline. This company is a globalised research-based pharmaceutical public limited company. Its ownership structure has changed a great deal since the original company was first established in 1715. Originally a pharmacy, the company has expanded, merged with and taken over other companies over the decades.
Even though most of us may not realized it, interest rate actually play an important role in our everyday lives due to its great effect on the buying power. For instances, if the interest rate is higher, people tend to reduce their spending and rather save it in the deposit account due to the large interest that they can gained. However, if the interest rate is lower, they rather spend it than keeping it in the deposit account. The reason for this is because the ups and down of the interest rates have a significant impact on their personal income. Furthermore, since interest rate have a major impact on investment it is important for the investors to keep track on these interest rate’s trend before making any decision.
The pharmaceutical industry is relatively immune from the effects of economic cycles. Demand for the industry's product remains constant in up and down economic cycles as market demand is a function of the overall health of the population. However the globalization of the pharmaceutical industry increases the risk associated with foreign investments and exchange rates. The firms in this industry seek to minimize risks by using hedging practices such as foreign currency forward-exchange contracts, borrowing in foreign markets, and using currency swaps.
Although Genzyme received tax incentives for its research and seven years market exclusivity, this strategy presented a risk in terms of long term sustainability and the company ventured into the development of other common drugs (Diversification). This provided the company with more alternatives and attracted more clients. By spreading its business in different areas, Genzyme was able to manage risks. But the company made sure there were no silos and maintained fluidity by allowing teams to take part in exchanges.
Phatak, A. (1998 йил 01-01). The pharmaceutical industry and the medical profession. Retrieved 2012 йил 19-01 from Indian Journal of Medical Ethics: http://www.ijme.in/064cr131.html
10. Collis, David, and Troy Smith. "Strategy in the Twenty-First Century Pharmaceutical Industry:Merck&Co. and Pfizer Inc." Harvard Business School, 2007: 8-12.
Corporate Social Responsibility (CSR) is the way a corporation achieves a balance between its economic, social, and environmental responsibilities in its operations so as to address shareholder and other stakeholder expectations. In general, when firms hold this wider encouraging role on the public by being engaged with stakeholders, a variety of profit can be produced for both company and the stakeholders. A key inclination is the combination of Corporate Social Responsibility (CSR) into the organization strategy, culture, mission and communications. By incorporating corporate citizenship into the company it is no longer an additional “nice thing to do” or something made to obey laws or regulations. Instead, corporate responsibility has become something business leaders and workforce want to engage in, frequently because executives who believe in the long-term see business profit. The four types of social responsibilities a...
An organization’s Corporate Social Responsibility (CSR) drives them to look out for the different interests of society. Most business corporations undertake responsibility for the impact of their organizational pursuits and various activities on their customers, employees, shareholders, communities and the environment. With the high volume of general competition between different companies and organizations in varied fields, CSR has become a morally imperative commitment, more than one enforced by the law. Most organizations in the modern world willingly try to improve the general well-being of not only their employees, but also their families and the society as a whole.
[6] Kripalani, Majeet & Egnardio, Pete. The Rise Of India. Business Week Online. December 8, 2003. http://www.businessweek.com/magazine/content/03_49/b3861001_mz001.htm
For commodity generic drugs, Teva has an opportunity to expand its core business into emerging markets, but there it will have to face institutional voids because such markets are driven by physicians and both physician and other people are not aware about the effectiveness of generic drugs. To cope with the challenge of institutional voids Teva have to look for some competent small pharmaceutical firms for acquisition and some big firms for the joint venture. For changing the perceptions of people and physicians, Teva will require to run marketing campaigns and direct approaches to physicians to develop a market for their products.
Subramanian, Arvind. India’s Economy is stumbling? The New York Times. August 31, 2013: A19. Print.
To gain such an outstanding achievement both domestically and internationally, the Aditya Birla Group has adopted two strategies: to diversify their business’s portfolio into a range of sector and to diversify them internationally. Firstly, to reach the first goal, they stepped in many areas such as viscose sta...
In the current time of growth and progression, individuals should know that how a business not only flourish but sustain itself. Making profit is one of the main targets of every corporates but it must not be the only one. When an individual builds a company in order to do business, they should be well aware of their contribution towards the society as well as their business and employees in it. It is total strategy of all. We should be able to realize every increment contributes of it. One of the major factors that affect a business is how well it participates in Corporate Social Responsibility. According to (Werther & Chandler, 2006) corporate social responsibility (CSR) refers to a business practice that involves participating in initiatives that benefits the society. In authenticity, there is a whole lot to argue about it. There are no major guidelines that decides either a business is participating in Corporate Social Responsibility; what might be considered a Business practicing CSR to some, can still not be accepted for it by others. CSR may be restrained a term which his highly flexible. This paper will discuss about Corporate Social Responsibility and its
Multiplicity of interest rates: Indian money market has many levels of interest rates. They differ from bank to bank from period to period and even from borrower to borrower. Again in both organized and unorganized segment, the interest rate differs. Thus, there is an existence of many rates of interest in the Indian money market.