Time to focus on Brand

The impact of the economic slowdown seems to be finally moving away from the Indian pharmaceutical industry. And riding on the roll back, Lupin, India’s fifth largest drug maker in terms of sales, has just unveiled its ambitious growth plans. After a successful stint in India, Lupin is all set to capture the US market. The company is planning to launch new branded generic drugs every year in the US in specialised theurapatic areas. And why not? The US pharmaceuticals market has always been a priority market for this drug major. In fact, it contributed around 35% to Lupin’s consolidated revenues for the financial year ending March 31, 2009. However, Lupin, which is one of the fastest growing company and is also amongst the top ten players in the generic markets including US, Japan, India and South Africa, has made this strategic move to increase its revenues and at the same time shield itself from the fluctuations of prices in the unbranded generic segment. Considering the fact that a lot of patents are about to expire, the move certainly makes a lot of business sense. Moreover, the advantage of having branded generic version of the drugs is that even though the cost of the drug comes down, the company can still continue to benefit from the sales of the drug even after the patent expires. This strategy has in fact been followed by many branded drug companies across the globe. Last year, Merck & Co. had also adopted the same strategy when the patent for its blockbuster osteoporosis drug was due to expire. It went ahead with the route of having branded generic version for this drug. Similar was the case with drug major Pfizer, which started selling the branded generic version of its antidepressant, after it went off patent in the year 2006. All this shows the enormous potential that this segment has. Even the stock market has responded favourably to this decision of Lupin and its share prices have soared after this announcement. No doubt, the strategy will further strengthen its presence in US and will add on to its revenues, but then, with rising competition from its domestic counterparts, the company will certainly have to fight hard to make its presence felt in the branded generic segment in the US.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Chaebols strike back

One of the sectors worst hit due to the recessionary waves across the globe was the consumer electronics segment. With consumer spending declining in American and European markets, the consumer electronics companies were suffering with a tremendous drop in sales and exports. Korean Chaebols, LG and Samsung were grappling to find a way out of this and looking at ways to boost consumer sentiments and enticing them to spend. So it does not come as a big surprise that the two South Korean majors have managed to post a better-than-expected performance in the quarter-ended June 2009. Both companies have attributed the reasons for their healthy bottomlines to the bullish sales of TV and mobile phones and are forecasting that the quarter ending September 2009 too will yield healthy figures. LG has already announced that it expects its sales to increase by 10% in the coming quarter. One of the reasons for the strong growth numbers for these companies is that both had launched smartly priced touch phones, which did good business across the globe. LG has already displaced Motorola from its third position in the handset category and is looking aggressively to increase its market share. However, the overall market situation is still grim with Sony Ericsson posting a loss of $302 million for the same period. Market leader Nokia has also cut its outlook for the year ahead. A strong yen is keeping the profit margins of companies like Sony, Panasonic, Sharp and Toshiba under tremendous pressure. LG and Samsung did well in the last quarter as well. Sales of their flat screen TV and Liquid Crystal Display units also seem to be following an upward trend as consumers are expecting these products to offer latest technology at affordable prices. Analysts too are bullish in their expectations from LG and Samsung and are hinting that it could well be a sign that the two chaebols are entering into another growth phase.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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An out of this world experience...

This is what most people expected from the Bandra-Worli sealink when it was showcased to the Mumbaikers last week. However, all those expectations seem to have been washed down the drain, in the early days itself. What’s more, it has started to give nightmares to its makers and even the government. One of the major reasons for the same is that this bridge over the sea has not achieved the kind of traffic it was supposed to get. A survey done by Mumbai Transformation Support Unit of the All India Institute of Local Self Government had shown that around 75,000 passenger car units were supposed to use the sealink on a daily basis, but till now only 32,000 are actually doing the same.

One of the reasons, why people are shying away from using this sealink is that it was build with an objective to reduce traffic congestions and the traveling time. As a matter of fact, in a report given to 4Ps B&M, HCC showed the kind of technology and planning that had gone in making the link and how it would reduce the traffic time for the Mumbaikars to just 7-8 minutes from 40 minutes between these two places. But, jams and chaos that are being caused on the link are actually ending up wasting more time standing on the bridge. Experts also believe that since the link does not cover the western shores, it’s not proving as useful as it was expected .

Moreover, as it’s built on a public private partnership (PPP) basis, it shows some of the biggest loopholes that are present in PPP projects. It’s not that there are any shortcomings in building this sealink, but the time, energy and cost that has been invested in its making has been more than expected. The deal was awarded to HCC way back in 2000, but the Bandra-Worli sealink has shown extensions both on the cost as well as time side. The project was expected to end in 2004, but it took five extra years to finish it and open up for public use. The cost of the project also surpassed its expected level of Rs.300 crore to reach a whopping Rs.1,600 crore.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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• Rashmi Bansal (Publisher of JAMMAG)