Competing on Differentiation: Case of Ranbaxy Laboratories

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Competing on Differentiation: Case of Ranbaxy Laboratories

According to the case study, while other companies were driven by large R & D budget, Ranbaxy Laboratories attained success by developing capabilities in manufacturing and marketing, fanning out into seven developing market, and growth in strength in product engineering. The company aimed at being a low cost manufacturer to compete with global players in market abroad. It does so by employing to the concept of total activity cost to optimize cost. Ranbaxy in global operations is determined into generic molecules and does not aim to venture into other areas. While in domestic market it has taken conventional route of branded products with it seven brands enjoying good market share. Ranbaxy also makes it difficult for new or potential entrants to enter its segment as it is eschewing the highly competitive segments of the market. Moreover the skills required in its product line are not easy to acquire. The choice of generic molecules in its global operations shows Ranbaxy understands the competitive environment. Since there is intense competition in the global market, process capability and the manufacturing process are the critical factors in the generic business. Having got this clue Ranbaxy focused its internal development in these two areas. However one of the strongest positions of Ranbaxy lies in the fact that it is vertically integrated in five stages of the value chain, which helps it to manage cost and quality across the chain. The marketing skills of Ranbaxy does not lie in deep distribution or selling skills but in the relationship it maintained with global customers, which are offered various marketing rights for Ranbaxy’s products. Having opted out of the mainstream drug business as a deliberate policy, the company has developed competitive advantages in areas where many large companies are only marginally involved. Ranbaxy’s competitive position and success should provide a useful...
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