Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition Description

In the first decade of 2000, major global innovator drug companies were acquiring or collaborating with generic drug companies. Daiichi Sankyo was the first major Japanese Pharmaceutical firm to test this 'hybrid' business model in early 2008 when it acquired a majority share in Ranbaxy, then the largest India-based generic drug company and a global generic drug manufacturer and exporter. At Ranbaxy, the acquisition was followed quickly by several leadership changes. Chairman/ CEO Malvinder Singh, the grandson of Ranbaxy's founder, resigned in May 2009; Atul Sobti who took over as CEO, resigned the following year citing differences with the Japanese company on the running of Ranbaxy. In early 2011, Ranbaxy President and Chief Financial Officer, Omesh Sethi also left the company. On the financial front, the Japanese firm booked a valuation loss of US$3.9 billion from the acquisition in the third quarter of its 2008 financial year and recorded a net loss of US$2.21 billion for that financial year. With the acquisition, Daiichi Sankyo was able to expand the scope of its global business and to lessen the concentration of its assets in Japan from 78.96% to 53.7% in 2011. However, in 2011, the Japanese firm had yet to reap the full benefits of its vision of a value chain based on an integrated hybrid business model. Was a transformational organizational change needed to realize this? The case study examines the cross-cultural challenges of integrating the two businesses as the leadership worked to implement the hybrid business model.

Case Description Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Strategic Managment Tools Used in Case Study Analysis of Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

STEP 1. Problem Identification in Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study

STEP 2. External Environment Analysis - PESTEL / PEST / STEP Analysis of Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study

STEP 3. Industry Specific / Porter Five Forces Analysis of Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study

STEP 4. Evaluating Alternatives / SWOT Analysis of Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study

STEP 5. Porter Value Chain Analysis / VRIO / VRIN Analysis Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study

STEP 6. Recommendations Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study

STEP 7. Basis of Recommendations for Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study

Case Analysis of Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition is a Harvard Business (HBR) Case Study on Leadership & Managing People , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Leadership & Managing People, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Leadership & Managing People Solutions

In the Texas Business School, Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Step 1 – Problem Identification of Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition - Harvard Business School Case Study

The first step to solve HBR Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Ranbaxy Daiichi is facing right now. Even though the problem statement is essentially – “Leadership & Managing People” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Ranbaxy Daiichi, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition.

The external environment analysis of Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study. PESTEL analysis of " Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

To do comprehensive PESTEL analysis of case study – Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Policy Making Impact on Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Government policies have significant impact on the business environment of any country. The firm in “ Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Ranbaxy Daiichi is operating, firms are required to store customer data within the premises of the country. Ranbaxy Daiichi needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Ranbaxy Daiichi in case study Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Ranbaxy Daiichi in case study “ Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Ranbaxy Daiichi in case study “ Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Taxation & Regulation Impact on Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Ranbaxy Daiichi can compete against other competitors.

Government Scheme & Subsidies Impact on Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System & Stability, and its Impact on Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Ranbaxy Daiichi needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Social Factors that Impact Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Technological Factors that Impact Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Environmental Factors that Impact Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Legal Factors that Impact Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition

Step 3 – Industry Specific Analysis

What is Porter Five Forces Analysis

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study. PESTEL analysis of " Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

Step 4 – SWOT Analysis / Internal Environment Analysis

Step 5 – Porter Value Chain / VRIO / VRIN Analysis

Step 6 – Evaluating Alternatives & Recommendations

Step 7 – Basis for Recommendations

References :: Cultural Challenges of Integration: Value Creation and Daiichi Sankyo's Indian Acquisition case study solution