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Biocon is India’s largest and fully-integrated, innovation-led biopharmaceutical company and is committed to reduce therapy costs of chronic diseases.
Through Biocon Foundation the Company is engaged in promoting social and economic inclusion by ensuring that marginalized communities have equal access to healthcare services, proper sanitation and educational opportunities.
Biocon's efforts in providing better healthcare through affordable innovation do not stop at developing new medicines.
In the case study during the year 2005, Biocon was the largest biotechnology enterprise in India. As of today, Biocon is ranked among the Global Top Ten Biotech Employers as of 2016. In addition, they continue to be the only Asian Company in the Prestigious Science Careers Top 20 Employers List.
GOAL: To Achieve annual revenues of $1 billion and to secure a place among the top 10 global biotech firms by 2015
Vertical Integration is a strategy that many companies use to gain control over their industry’s value chain. In layman terms, it is when one company takes complete control over one or more stages in the production of a product. This ensures full control over the supply of the raw materials to manufacture its products.
In order to execute her goal, in 2005, Mazumdar- Shaw envisioned building a vertically integrated biotechnology enterprise with a strong discovery orientation.
An example of vertical integration currently in the organization today is when Biocon strategically collaborated with Mylan. Mylan handled the commercialization of product development, while Biocon handled the scientific portion of product development. Together, they were able to mitigate the costs of product development, as well as improve quality.
Background
Biocon began in 1978 and was created as a joint venture .
The founders of Biocon are:
Biocon started off as an enzyme manufacturing company and later has become a full on biopharmaceutical enterprise.
To this day, Mazumdar-Shaw remains chairman and managing director with 60% of the company's stock .
Under her direction, Biocon's early years were in genetic drugs and enzyme.
Background
Background Continued
Specialized Areas:
1. Enzymes
2. Biopharmaceuticals
3. Custom Research
4. Clinical Research
Biocon has been able to differentiate itself due to its skill and ability to ferment.
Biocon used its skill in fermentation to set itself apart from competition, mainly caused by the WTO patent law which was introduced in 2005.
Background
In the past, Biocon aligned with Clinigene who handled their clinical trials, which benefited Biocon because of India’s “large population and low cost pool of qualified medical and scientific professionals to provide quality clinical research services at attractive prices and to facilitate rapid establishment of trial groups.”
Biocon’s main focus was clinical trials for new drug molecules in phases 1 - 3.
Mazumdar-Shaw’s ability to add businesses that increase growth by partnering up and getting the company closer and closer to the next goal is what has made Biocon so successful.
Leadership Issue:
Competitive Issue:
Biocon’s core competencies in 2005:
Biocon’s Core Competencies Today:
a. Microbial Fermentation
b. Human Insulin & Biosimilars
c. Mammalian Cell Structure
d. Chemical Synthesis
Biocon is committed to finding biotechnology solutions in global health care.
•Two focal points of disease research: Diabetes & Cancer
•Final level of evolution in becoming a fully integrated biotech company: Creation of Proprietary Drugs
•Cancer drug Biomab is key to entering into this market successfully
Risks Associated with Drug Discovery:
High Cost: A consequence in an emerging market means the company has to spend a significant amount on research, advertising, and marketing.
High Risk of Failure: Another consequence of an emerging market is a substantial risk of product failure.
Competition: The market is an example of an Oligopoly, because Biocon is competing against other companies that have similar products to what they have. The competition is mostly based on quality, than price.
World Trade Organization (WTO) Patent Law:
Little Experience in:
Spreading The Company Too Thin:
A Strategic Alliance occurs when two or more organizations join together to pursue mutual benefits.
Forming a strategic alliance with global companies is the key to success for Biocon. By partnering with global companies, Biocon can:
In a Joint Venture Alliance, it has few members, but each member is able to have direct ownership and large directional authority because each party (member) contributes capital equally as well as holds equity all the same.
Benefits Include:
We are also recommending forming a Virtual Vertical Integration. This can be achieved when organizations/companies focus their investments on specific areas of specialization.
Benefits Include:
1. Build a team that has experience in commercialization, specifically marketing pharmaceutical products.
2. Conduct a Patient Origin Study;
a.This is in order to identify drugs that will best fit the needs of their surrounding population to maximize chance of profit.
3. Measure the Market Structure;
a. Biocon may be able to utilize a focus-differentiated strategy depending on the results of the market.
4. Researching products that best align with the results obtained from the patient origin study and market structure measurement.
5. Develop and market the product.
The Future of Biocon
Mazumdar-Shaw in 2005 had a great vision in mind of acheiving $1 billion in revenue and to be in the Top 10
global companies by 2015.
Biocon managed to become one of the top 10 global companies in 2016.
However, Biocon will continue to strive towards the goal of achieving annuals sales of $1 billion.