Background: Eli Lillys was only able to access Indian market through the creation of a Joint Venture, with

local partner Ranbaxy, from a previous investigation I understand that India has very particular guidelines around Foreign Direct Investment, and this case is the perfect example on what are the strategies that a TNC can use to access a particular market, which will is a trend in Todays context given the increasing need of accessing the markets of developing economies. Although partnership was ideal for both parties, as Ranbaxy would benefit from Eli Lilly by learning capabilities to compete internationally, external conditions that influence Intellectual Property framework are a risk for Ely Lilly in order to protect its patents, which is one of the main assets of the pharmaceutical industry. Main Issues: External factors are not the only ones affecting this relationship as there are factors related to the partners of the Joint Venture, that make evident the need of further dedicating time to manage this relationship to achieve positive outcomes. Although given health conditions in India, together with a high internal consumption, Eli Lilly found India attractive in terms of increasing volume and not market share, since India had a very lax regime around Intellectual Property rights before 1995, this could probably made them see Ranbaxy more like a operations outsourcing to reach local market rather than a strategic partner to play with in the long term. Foreign Direct Investment policies have changed from the moment the Joint Venture was agreed, as pharmaceuticals are allowed to invest 100 % of the venture, eliminating the need of using a third party in the middle. Despite the fact describe above, there is a negotiation leverage playing in Ranbaxys advantage, as India is clearly a very fragmented market, with a high ratio of rural population, which implies a the need of complex logistics network to reach final consumer. Both partners of the Joint Venture were only pursuing to mimic organizational capabilities, which was creating a complex collaboration, efforts seemed at this moment to be focused in managing the risks and costs from collaboration rather than maximizing business results for the two parties, in the other hand Eli Lilly does not possess brand recognition in India, which makes him dependent of a 3rd party

Recommendations: Most of the issues present in this situation rely in how collaboration was defined, and the lack of transparency by the two parties to make clear what the ultimate benefit they were pursuing was, thus recommendations for this case are: Establishing a clear collaboration framework to avoid unnecessary costs to manage relationship, although relevance of operation is quite important, it seems to me that they overreacted in assigning such a huge group to manage the Joint Venture. Since Indian market seems to be in a constant change it is important for the participants of the Joint Venture to develop scenarios to react to changing

environment, with this a general idea on what are the possibilities for the Joint Venture to survive is better defined. Leverage on the key strengths of the other, Ranbaxy could clearly benefit from Ely Lillys global scale as well, and having a more fructiferous agreement, in that way financial leverage would be better than the one observed in this moment. If alignment of the key points described above cant be met, a very good recommendation for Eli Lilly is betting in Indias market, as it is a privileged position to serve other markets in the area, like China in example. In the other hand, is clear the attractiveness of attending more urgent health needs markets evolution together with improved per-capita income. Ranbaxy operational leverage can be used not only in a Joint Venture with Eli Lilly, it can provide access to Indian market by partnering with other major players in other less strategic matters, given its infrastructure and knowledge of both countrys needs and infrastructure.