Strategic Analysis Report: Biocon India Group's Performance

This report provides a comprehensive strategic analysis of Biocon India Group, a prominent biopharmaceutical company based in Bangalore, India. The analysis begins with an introduction to Biocon, its mission to provide affordable healthcare solutions, and its operational scope in global markets. It then delves into a SWOT analysis, highlighting Biocon's strengths such as its diverse product portfolio and global presence, alongside weaknesses like capacity constraints and threats from competition and fluctuating raw material prices. The report further examines Biocon's strategic path, including its mission and vision statements, and analyzes its industry environment using Porter's Five Forces, assessing industry competition, buyer and supplier power, barriers to entry, and the threat of substitutes. Additionally, the report applies the VRIO framework to evaluate Biocon's resources and capabilities, focusing on brand experience, physical location, and technology, and suggests strategies for enhancing its competitive advantage, such as global-scale manufacturing and human resource development. The report concludes with a discussion of the organization's strategic position and recommendations for future growth.

Strategic Management Analysis
Biocon India Group

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Table of Contents
Introduction......................................................................................................................................1
Question 1........................................................................................................................................2
Mission and Vision Analysis.......................................................................................................2
Question 2........................................................................................................................................7
Scenarios and Industry Analysis..................................................................................................7
Question 3......................................................................................................................................11
Resources and Capabilities of Biocon India Group...................................................................11
Question 4......................................................................................................................................13
Conclusion.....................................................................................................................................15
References......................................................................................................................................16
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Introduction
Background
Biocon Limited is considered as a popular biopharmaceutical organization which is based in
Bangalore in India. It is having a great experience in manufacturing generic active
pharmaceutical ingredients. In this report, we will study about the strategic framework of the
organization on the basis of which it gains huge popularity in the market of India. It helps us in
knowing the resources, competencies, and competitive advantages of the organization. The main
objective behind the establishment of the Biocon Limited was that it wants to ensure a global
right to healthcare by identifying the global need for effective, safe, and affordable bio
therapeutics. It utilizes advanced technology to produce its product with high quality which
makes it different from others. The organization operates in the global market of Europe and the
United States. Apart from active genetic ingredients, it also produces insulin which is sold in
India in bulk quantity. During 2009, it acquired the ingredients of the Active Pharma which
enhance the size and product line of the organization. Biocon established in 1978 with the initial
capital of $150. It is because the founder of the organization failed to find any financial
institution for made investment in their proposal. Global scale manufacturing capacity with high-
quality products makes it different from the other existing pharmaceutical organizations. It is
recognized for safe, innovative, and high-quality pharmaceutical products.
Purpose of Study
The important objective of the organization behind conducting the strategic analysis of the
Biocon Limited is to introduce the role of strategic management in promoting the sale of its
products and establishing its brand value in its potential markets through which it is able to
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market itself as an experienced manufacturer. Apart of it, different strategic paths of the
organization are also discussed which exposed in the front of the organization. Furthermore, it
can be said that the report is prepared to be a strategic pathfinder of the organization by
identifying its mission, vision, and values and different strategic initiatives of the organization
(Calcaterra, 2013). Identify the strategic path helps us in measuring its current position in the
market. In addition, we also suggest some recommendations and better approaches in the light of
its weaknesses, opportunities, threats, weaknesses, and strengths which evolve around the whole
organization.
Question 1
Mission and Vision Analysis
Biocon Limited mainly believes in providing differentiated product portfolio with a focus or
more affordability and accessibility (Annual Report, 2015). The innovation strategy of the
organization is highly linked with its current trends of global healthcare biologics. The below
mentioned are the vision and mission statement of the organization:
Vision
The main vision due to which the organization comes into enforcement is to increase the global
healthcare by offering affordable or innovative biopharmaceuticals for partners, patient, and
healthcare systems across the different countries.
Mission
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The mission is considered the important statement of the organization which defines the
organization completely. The mission of which the company comes in existence is to be an
integrated Biotech organization of global distinction (Annual Report, 2010). Furthermore, the
organization formulates some essentials for accomplishing the mission. The mission is bringing
excellence in following:
 State-of-art production capabilities
 Development of human resources with the help of training, empowering and mentoring
 Introduction of innovative medical insight through conducting disease specific medical
research
 Creation of intellectual asset through development, research, and discovery.
 Efficient regulatory system with internationally benchmarked quality
 Efficient relationship with its potential customers through providing outstanding services
and products.
 Management of business partnership and research.
SWOT Analysis of Biocon Limited
Positive Negative
Internal
List of Strengths
1. Broad portfolio of
high-quality
biopharmaceutical
products.
2. Usage of advanced
ERYPTRO
List of Weaknesses
1. High capacity
constraints due to
labor disruption or
construction delays
(Annual Report, 2015)
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technology such as
composite or utility
transmission line.
3. Core competency in
developing
differentiated products
with chemical and
physical properties
such as POM, LFRT,
and PBT, ERYPRO,
RENODAPT, etc.
4. High-class technology
for production of
products, such as anti-
counterfeiting
technology for
producing original
equipment.
5. Global Presence in
countries like the US,
Europe, etc.
6. Expansion of portfolio
to include products
2. Poor relationship with
supplier due to
inability of a supplier
to meet delivery
orders on timely basis
(Annual Report, 2015)
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with higher stiffness,
and impact, improved
wear and enhanced
the appearance or low
emissions (Annual
Report, 2015).
External
List of Opportunities
1. Growing demand for
RENODAPT, and
ERYPRO ("ERYPRO
Market Size Projected
to reach $2.60 Billion
by 2022", n.d.)
2. Growing demand for
biopharmaceutical
products such as
insulin,
List of Threats
1. High competition
between industry
competitors (Annual
Report, 2014)
2. Increasing volatility in
prices and availability
of raw materials has a
significant negative
impact on the
financial margins.
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mycophenolate
mofetil and BIOMAb.
(Annual Report, 2015)
3. Fluctuations in
environmental
regulations
concerning climate
change influence the
profitability level
(Annual Report, 2015)
4. Presence of various
unanticipated
operational or
commercialization
difficulties such as the
development of
competing
technologies (Annual
Report, 2015)
These statements support the competitive advantage of the organization in a larger context. Due
to the high strength in research and development, the organization able to gain its competitive
advantage in the production of oncology and Diabetology products. With the help of these
products, the organization is able to gain more than 50% share in its existing market (Swayne,
2012). Its innovativeness and high quality make it enable to offer large customer products and
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services with high quality. Its mission is to State-of-art production capabilities. It utilized this
concept in an efficient manner. On the basis of this basis of excellence, the organization is able
to introduce new proprietary fermentation technology for production of rh-insulin. With the help
of this technology, it can help millions people or patients across the different countries.
Question 2
Scenarios and Industry Analysis
Porter Five Forces Analysis
It can be said that the business environment of the recent time is extremely competitive. As per
the economic parlance, it can be said that where perfect competition exists, the profits of the
organizations working in that industry will become null in long run (Zhou, 2016). However, it
can be said that there is a no perfect competition in the industry and no any organization is a
passive price taker. In the pharmaceutical industry, they strive to establish their competitive
advantage to thrive in the scenario of the competitive environment. The below mentioned are the
five forces which influence the pharmaceutical industry:
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1. Industry competition: Industry of Pharma is considered the most competitive industry in
the whole country. It is because more than 11,000 different players are fighting for the
similar pie. The existence level of rivalry can judge on the basis of the fact that the top
player in the Pharma industry has only 6% market share. On the other hand, the top 5
players in the industry only have 18% market share
(https://www.equitymaster.com/detail.asp?date=08/27/2004&story=5&title=Pharma-Through-
Porters-eyes). On the basis of this, it can be said that concentration ratio for the industry is
very poor than the other existing industries such as food and beverages, etc. All these
facts influence the presence and differentiation capacity of the organization to a larger
extent. It is because the high growth practice in the industry attracts a large number of
competitors. Due to this, it becomes very tough for the organization to perform its
operations.
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(Source: https://www.equitymaster.com/detail.asp?date=08/27/2004&story=5&title=Pharma-
Through-Porters-eyes)
2. Bargaining power of buyers: The key characteristic of the industry is that the end user of
the product and service is different from the Doctor or influence. Here, the customers
have no choice to prefer other products because they need to purchase the same product
as recommended by their concerned doctor. Therefore, when we look the power of
buyers, we look at the effect they have on the prices of different products. In this
industry, the power of buyers are very low (Fitzgerald, 2013). On the other hand, it can
be said that government is engaged in regulating the policies of this industry. It was done
with the help of National Pharmaceutical Pricing Authority.
3. Barriers to entry: It is an industry which is easy to access by the different entrepreneurs.
It requires a low capital as an initial investment. Due to the sales restriction, it is easy for
the new entrants to establish their regional distribution network. On the other hand, the
creation of franchise and brand awareness amongst doctors is the important key to getting
success for long time survival (Blackwell 2014). But the hurdles of quality regulations
may prevent the different entrants to enter the industry. Due to this, there is less
competition and the organization need not fear from the competition.
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