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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,
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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,

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