Internationalisation strategies of Indian pharmaceutical firms

Kale, Dinar (2010). Internationalisation strategies of Indian pharmaceutical firms. PharmaBuzz, 5(10) pp. 6–13.

URL: http://www.pharmabuzz.org

Abstract

In last decade a host of new multinational enterprises have risen from developing countries such as India and China. These new MNEs are dominating global economy and challenging existing paradigms of international business literature. In this context this paper tries to explore whether internationalisation of firms from developing countries can be explained in terms of mainstream theories derived mainly from studies of Western multinational corporations or do these cases present new insights in the explanations that have been offered for latecomer multinationals. With this in mind, the present paper explores patterns and motives for internationalisation by Indian pharmaceutical firms. It focuses on internalisation that is directed towards expansion into foreign markets and accessing new technologies. This paper moves beyond study of export from domestic units and investigates different strategies adopted by Indian firms to internationalise their operations. The evidence presented in this paper shows that Indian pharmaceutical firms are internationalising by acquiring small firms as well as setting up their subsidiaries, in order to access resources, move up value chain and enter new markets. The leading Indian pharmaceutical firms show that high-risk strategy of acquisitions and direct foreign entry can yield rich dividends, provided it is backed up with superior technology savoire-faire in the targeted niches. Thus, this study shows how leading developing country firms can become independent players in oligopolistic industries without major technological assets of their own and proves that internationalisation, a strategy hitherto perceived to be the strategic domain uniquely of Western firms (given resource asymmetries) can be deployed by developed country firms as well.

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