Strategic Implementation & control Project Report on organizational structure and strategies adopted by prominent players in Indian pharmaceutical industry

1. Indian
Pharmaceutical
Industry
Organisation Structure &
Strategies
Submitted By: Group 6

2. •
Dimensions of organizational structure
Structuring of
Activities
Concentration
of Authority
• Specialization of activities
• Standardization of procedures
• Formalization of documentation
• Centralization of authority
• Configuration of role structure
Organisation Structure Overview: Industry practices

3. •
Indian pharmaceutical Industry wide organization
structure mostly follows CHANDLER TIME-LINE
t Simple Structure. Centralized.
Single Product Line
t+1 Moderate Centralization, Moderate Formalization, Moderate Complexity
t+2High Complexity, Low Centralization, Moderate Formalization
Organisation Structure Overview: Industry practices
(continued)

4. Simple
Structure
Efficient implementation
of formulated strategy
Multidivisional
Structure
Sales GrowthCoordination and
Control Problems
Functional
Structure
Efficient
implementation
of formulated
strategy
Sales GrowthCoordination and
Control Problems
Organisation Structure Evolution: Industry practices

5. Portfolio of Companies

6. Functional Structure (U) form
Sun Pharmaceutical Industries Limited

7. Sun Pharma follows a Functional Unitary Structure
Structured
around a CEO
and limited
corporate staff
Each functional
unit has
different set of
duties and
responsibilities
Activities are
grouped
together by
common
functions.
Specialization is
built into the
organizational
structure.
• Optimize Operational Cost
• Vertical Integration
• Differentiation Strategy
• Provides functional clarity
Sun Pharmaceutical Industries Limited

8. High Quality
portfolio :Mix
of limited
competition
and complex
generics
products to
significantly
enhance
Multi-divisional form (M-Form)
Dr. Reddy’s Laboratories Limited
Service Level
excellence:
Continued
strong
engagement
with strategic
customers
Strategic
Focus
Steady growing
business : 12-15
new launches
annually with
launch-year

9. •
The company grows through geographical diversification
and exploiting synergies among divisions
Monitoring
and
comparing
performance
between
divisions
Strategic
Planning
Offers high
quality
portfolio – easy
to manage
because of the
various
divisions
functioning
Easy to make
Strong
engagement
with strategic
customers
because of
separate
economic
activities
Dr. Reddy’s Laboratories Limited
Focus on
company’s
overall
growth rather
than
divisional
growth

10. Actively pursue
acquisitions in
the American
region
Multi-pronged
strategy
to improve its brand
image, increase
revenues, and
expand its product
and service
portfolio
Increase in R&D
expenditure
and strategic
investments
Multi-divisional form (M-Form)
Lupin Limited
Strategic
Strategic
Focus
alliance
Partners

11. • Quasi-autonomous operating divisions
• Organized along Product, brand or geographical lines
• Appropriate for related-diversified businesses
• Having process framework that integrates the entire organization; from strategic
support functions like finance, human resources, regulatory affairs to core operations
and delivery units like global procurement, research, manufacturing and supply chain.
• Key task of corporate managers is exploiting synergies among divisions
• Managers use a combination of strategic controls and financial controls
• Enables Monitoring performance, Awarding incentives, Allocate cash flows to high yield
uses, Perform strategic planning
Lupin Limited

12. Contract
manufacturing,
Outward
investment as a
strategy to
become a
global player
licensing and
collaborative
research
Strategic
Focus
Multi-divisional: Cooperative M form
Ranbaxy Laboratories Limited
Strategic
Synergies
:Daiichi Sankyo
Partnership.
Innovator and
Generic
Pharmaceutica
l Powerhouse

13. Structural
Integration
devices create
tight links among
all divisions
Corporate office
emphasizes
centralized strategic
planning, human
resources, and
marketing to foster
cooperation
between divisions
Cooperative
M form
Rewards are
subjective and tend
to emphasize
overall corporate
performance in
addition to
divisional
performance
R & D is
centralized
activity.
Advantages
Uses objective
market/output
performance
measures, bureaucratic
controls, and
clan/cultural controls
Encourages the
exploiting of economies
of scope across divisions
Frees corporate to focus
on strategic concerns
Culture
emphasizes
cooperative
sharing
Ranbaxy Laboratories Limited
Facilitates
diversification and
growth

14. 1.
http://www.ranbaxy.com
2.
http://www.drreddys.com
3.
http://www.lupinworld.com
4.
http://www.sunpharma.com
5.
http://indiaratings.co.in/upload/research/specialReports/
2013/1/29/fitch29Pharmac.pdf
6.
http://www.cii.in
7.
http://www.mckinsey.com
References