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Mini project

On

“THE CURRENT ACCOUNT DEFICIT IN EUROPEAN EMERGING


MARKET”
Submitted in partial fulfillment of the requirements for the award of the
degree of

MASTER OF BUSINESS ADMINISTRATION

Of

BANGALORE UNIVERSITY

By

SRINIVAS.V
Reg. No: 17KXCMD089
Submitted to

DR.SATHEESH

SURANA COLLEGE

POST GRADUATE DEPARTMENTS

Kengeri, Satellite Town

Bangalore-560060

2018-2019
Contents:

Introduction

Company profile

Modes of the international trade

Brief note about the subsidaries

Conflict management of lupin

Economic integration and contribute to the country.

Export import challenges


Introduction
The pharmaceutical industry discovers, develops, produces, and markets drugs or
pharmaceutical drugs for use as medications to be administered (or self-administered) to
patients to cure them, vaccinate them, or alleviate a symptom. Pharmaceutical companies
may deal in generic or brand medications and medical devices

Company profile
Lupin Ltd. is a multinational pharmaceutical company based in Mumbai, Maharashtra, India.
The company manufactures and sells a wide range of Branded and Generic Formulations,
Active Pharmaceutical Ingredients (APIs), Advanced Drug Delivery Systems (ADDS) and
Biotechnology products - in over 100 countries.

Modes of International Business:

 The five most common modes of international


 Market (entry are exporting)
 Licensing
 Partnering
 Acquisition Greenfield venturing.

List of countries where they have business and country specific strategies
adopted by them in the international business
Marketing Mix of Lupin analyses the brand/company which covers 4Ps (Product, Price, Place,
Promotion) and explains the Lupin marketing strategy. The article elaborates the pricing, advertising
& distribution strategies used by the company

Product:

Lupin is one of the leading pharma companies in India. Lupin’s businesses can be classified
into, Formulations both generic and branded; API’s; Advanced Medicine Delivery Systems
and also Biotechnology. It is one of the largest producer for medicines that cure tuberculosis.
And the Lupin company has a major market shares in the medicines that cater to segments
like - Asthma, CNS, GI, Pediatric, Anti-Infective and NSAID. All these offerings in the
product mix are a part of the marketing mix. Also Lupin holds a key position in other
segments like Cardiovascular and Diabetology. Its API business is the key driver of revenues
and market share and Lupin targets to develop 4 to 6 API’s per quarter. From 2014 it is
developing API for third party businesses in advanced markets. Its advanced medicine
delivery system focuses on creating technologies that provide clinical technology and
facilitate a good patient experience. Lupin’s biotechnology division develops biosimilar’ s
addressing oncology, diabetes and other therapies.

Price:

Lupin has several product offerings and hence has a diverse price range. Prices of pharma
products are regulatory controlled in India unlike America where medicine manufacturers are
free to price their product. Many developing countries across the globe uses price, volume
and cost-effective controls to mitigate any price increase in medicines. In India National
Pharmaceutical Pricing Authority sets, the maximum price above the retail price of leading
company. And it allows a 16% margin to retailers while fixing the ceiling price. So Lupin
prices its products differently in different countries of its operations based on the policies of
those countries. So safe to say a differential pricing. Before the frequent changes by NPPA it
used to have a cost based pricing. Lupin gets nearly 81% of its revenues from formulations
and rest from the API’s. All this gives an insight in the how the company prices’ its products
as a part of its marketing mix

Place:

Lupin is present across many developed and developing markets in the world. Its major
markets include India, USA, Japan, Europe, Mexico & Latin America South Africa,
Philippines and Australia. Lupin’s medicines reaches nearly 70 countries in the world and
have a strong distribution networks. It also emphasises on large sales force teams. Lupin
enters into strategic alliances with the local players in foreign markets to capitalize on their
strengths like strong distribution networks. Its partnership with Novartis, Eli Lilly and Merck
Serono are some examples for this strategy. Lupin has corporate offices in many locations
where it operates and in India it is located at Bandra, Mumbai.

Promotion:

Lupin collaborates with other players in the industry for co-promotional activities. Its
agreement with Boehringer and Eli Lilly are some of the examples for this phenomenon. It
has a strong field force for each of the business units it is working in. for example in diabetes
related segment Lupin holds strong 400-member field force. Its sales representatives go to
doctors and promote Lupin’s medicines. As physicians are more important in prescribing
medicines to patients most or all the marketing activities are targeted towards them. It
promotes the brands to doctors and pharmacy stores. It gives good sales promotions to
existing and new clients with customized propositions to each of those customers. The logo
of the company is Lupin flower and it is named after the same. The reason for this is the traits
of the lupin flower like nourishing the land where it grows and Lupin’s objectives are closely
related to this phenomenon. It provides information about the company in its website and
press releases. Hence, this covers the marketing mix of Lupin.

Key markets and businesses

USA
Headquartered in Baltimore, Maryland, Lupin Pharmaceuticals Inc. (LPI) ], the company's
US subsidiary is a $891 million enterprise.[It has a presence in the branded and generics
markets of the US. In the branded business, Lupin operates in the CVS and Pediatric
segments. The company is the market leader in 28 products out of the 77 products marketed
in the US generics market, of which it is amongst the Top 3 by market share in 57 of these
products (IMS Health, December 2014): Suprax (Cefixime), a paediatric antibiotic, is Lupin’s
top-selling product here. Other products in Lupin's branded portfolio include Antara<
(Fenofibrate), Locoid lotion, Alinia (Nitazoxanide) and InspiraChambers (Anti-static valved
holding chamber). The company is also the 5th largest and fastest growing generics player in
the US (5.3% market share by prescriptions, IMS Health). Lupin's US brands business
contributed 9% of total US sales whereas the generics business contributed 91% during FY
2014-15.[21]
India Region Formulations (IRF)
Lupin’s IRF business focuses on Lifestyle diseases and Chronic disease therapy segments,
particularly in Cardiology, Central Nervous System (CNS), Diabetology, Anti-Asthma, Anti-
Infective, Gastro Intestinal and Oncology. The IRF business contributed 24% of the
company’s overall revenues for FY 2014-15, growing by 20% and recording revenues of
₹29,676 million (US$410 million) for FY 2014-15 as compared to ₹24,794 million
(US$340 million) for FY 2013-14.

It has 12 manufacturing plants and 2 Research plants in India, as Jammu(J&K),Mandideep &


Indore(Madhya pradesh), Ankaleswar & Dabasa (Gujarat), Tarapur, Aurangabad and Nagpur
(Maharashtra), Goa, Visakhapatnam (Andhra Pradesh) and Sikkim; where research centre at
Pune and Aurangabad.[22] Among these the baby plant is Nagpur plant which will the biggest
formulation unit for Lupin in coming year.

Europe
Lupin’s focus in the European Union encompasses Anti-Infectives, Cardiovascular, and CNS
therapy areas, along with niche opportunities in segments like Oral Contraceptives,
Dermatology and Ophthalmics. The company’s presence in France is by way of a trade
partnership; in Germany, it operates through its acquired entity Hormosan Pharma GmbH. ]
(Hormosan); while the UK business is a direct-to-market initiative.

Japan
Lupin is the fastest-growing Top 10 generic pharmaceuticals player in Japan (IMS) It
operates in Japan through its subsidiary, Kyowa Pharmaceutical Industry Co. Ltd. (Kyowa),
a company acquired in 2007, and I’rom, Pharmaceutical Co. Ltd (IP), acquired in
2011.Kyowa has an active presence in Neurology, Cardiovascular, Gastroenterology and the
Respiratory therapy segments. I'rom is a niche injectables company.

In 2014, Lupin entered into a strategic joint venture agreement with Toyama-based Japanese
pharmaceuticals company, Yoshindo Inc. to create YL Biologics (YLB).YLB will be jointly
managed by both partners and wil be responsible for conducting clinical development of
certain biosimilars including regulatory fillings and obtaining marketing authorization in
Japan.

South Africa
Lupin's South African subsidiary, Pharma Dynamics (PD) is the fastest growing and the 4th
largest generic company in the South African market (IMS) The company is a market leader
in the Cardiovascular segment and has a growing presence in Neurology, Gastroenterology
and the Over the Counter (OTC) segments.

Australia
Lupin entered the Australian market through its subsidiary, Generic Health Pte. Ltd. (GH).It
subsequently acquired the worldwide marketing rights to the over-100-year-old Australian
brand Goanna, used for pain management.

Philippines
Lupin's Philippines subsidiary Multicare Pharmaceuticals (Multicare), is a branded generic
company focused on Women's Health, Pediatrics, Gastro-Intestinal and Diabetes care. FY
2012 also marked its foray into the Neurology segment when it entered into a strategic
marketing partnership with Sanofi.
Mexico & Latin America
In 2014, Lupin acquired 100% equity stake in Laboratories Grin, S.A. De C.V. (Grin),
Mexico, a specialty pharmaceutical company engaged in the development, manufacturing and
commercialization of branded ophthalmic products. This marked their entry into Mexico and
the larger Latin American pharmaceuticals market. In May 2015, Lupin entered the Brazilian
market with its acquisition of 100% stake in Medquímica Indústria Farmacêutica S.A., Brazil,
(Medquímica).

Export and Import related procedures and financing

Export Financing/Advances

This is a credit operation in which the bank advances a specific amount, in any officially
traded currency, to an exporter so that it can collect the value of deferred-payment sales made
to a foreign importer. This process involves three parties:

 Financial institution
 Exporter
 Foreign importer

The financing must always be linked to an export operation.

Process

1. A sales agreement is struck between the Spanish exporter and the foreign importer.
2. The exporter delivers the goods to the foreign importer, who agrees to pay for them on a
future date.
3. The financial institution advances the value of the operation to the exporter in local
currency, or any other currency.
4. On the agreed expiry date, the importer pays for the purchase.
5. The exporter repays the advance using the importer’s payment.

Length of contract The contract length will normally coincide with the payment deferment
given to the importer or the person who receives the service. In the event that the periods
differ there are two alternatives:

- Pre-financing: The bank finances the exporter for the manufacture of the goods.

- Post-financing (Advance): The bank advances, partly or in full, the value of the operation
once the goods have been despatched. Generally the periods involved in this type of
operation do not exceed 90 days. It is normally advisable that the period exceeds the expiry
of the operation by 10-15 days, owing to delays that may arise with payments from abroad. •
Amount The maximum amount that can be financed is the value of the goods plus those
costs (shipping, insurance, etc.) that, although borne initially by the exporter, will eventually
be reimbursed by the importer. • Currency The currency of the financing/advance may be
any officially quoted currency. The currency need not be the one in which the export
operation is denominated, although it is advisable for the currencies to be the same to avoid
the risk of exchange rate fluctuations. • Repayment Repayment must match the deadline set
by the financing/advance, although there is no objection to early repayment, in which case an
adjustment to the interest payable would be made. • Interest rate The interest rate used will
depend on the currency in which the financing is denominated. • Exchange rate risk When
the currencies of the financing/advance and the repayment differ, an exchange rate risk is
created to which the exporter may respond in one of two ways: accept it or offset it by taking
out exchange rate insurance or a foreign currency option.

Financial institutions use forfaiting, a non-recourse financial product, to offer their exporter-
customers the option to sell, without recourse, the commercial credits arising from their
exports. In those cases where the importer is declared insolvent, the banking institution
cannot reclaim the money from the exporter.

Forfaiting enables the banking institution to offer its exporter-customers the following:

 Collection of payment is guaranteed.


 The exchange and interest rate risk disappear, as the funds are advanced.
 The political and commercial risk of the operation is eradicated.
 It furnishes liquidity.
 It enables the transaction to be removed from the balance sheet.
 It enables more to be sold, or more expensively, by enabling longer credit terms to be
offered.

In general terms, this type of operation involves large sums as well as deferred payment,
which prompt the seller’s financial institution to ask the bank in the importer’s country to
guarantee the operation. This is done via additional guarantees or the underwriting of the bills
that are used to pay for the export.

Lines of credit are not granted in forfeiting operations; rather, the financial institutions that
offer forfeiting analyze and offer this type of financing on a case-by-case basis.
Financing Imports

With this credit operation, Santander finances the period needed to sell and receive payment
for an imported product. As a result, the importer requests financing owing to:

 Insufficient funds to pay on delivery.


 The availability of better purchase prices.

Although similar to a domestic loan, this operation differs in that the payments are used only
to pay for imports. This process requires the involvement of three players:

 Financial institution
 Spanish importer
 Foreign exporter

The financing operation must always be linked to the payment of imports.

Process

1. A sales agreement is struck between the importer (customer of the bank) and the foreign
exporter.
2. The foreign exporter delivers the goods to the importer.
3. The importer (the bank’s customer) requests financing from their bank so that it can pay the
foreign exporter.
4. The importer’s bank pays the foreign exporter.
5. When it expires, the importer (bank customer) repays the financing with the proceeds of the
sales.
Characteristics of Import Financing

 Length of contract
The contract length will coincide with the period needed to sell and collect payment for the
imported product. Depending of the product involved, the periods in this type of operation
do not normally exceed 90 days.
 Amount
Up to 100% of the operation, and even more if the purchase is ordered FOB (Incoterm)
 Currency
The currency used in import financing can be any officially traded currency. It does not
necessarily need to coincide with the currency in which the import/export is denominated,
although it is advisable for them to be the same.
 Repayment
Repayment must comply with the deadline set in the import financing.
 Rate of interest
The rate of interest used will depend on the currency in which the import financing is
denominated.
 Exchange rate risk
When the currencies of the import financing and the proceeds earned by the importer from
selling the goods differ, an exchange rate risk is created; the importer may respond in one of
two ways: accept the risk or offset it by taking out exchange insurance or a foreign currency
option.

Conflict management-arbitration, negotiation


Conflict management is the process of limiting the negative aspects of conflict while
increasing the positive aspects of conflict. The aim of conflict management is to enhance
learning and group outcomes, including effectiveness or performance in an organizational
setting.[1] Properly managed conflict can improve group outcomes.

Arbitration, a form of alternative dispute resolution (ADR), is a way to resolve disputes


outside the courts. The dispute will be decided by one or more persons (the "arbitrators",
"arbiters" or "arbitrarily tribunal"), which renders the "arbitration award". An arbitration
award is legally binding on both sides and enforceable in the courts

Arbitration is often used for the resolution of commercial disputes, particularly in the context
of international commercial transactions. In certain countries such as the United States,
arbitration is also frequently employed in consumer and employment matters, where
arbitration may be mandated by the terms of employment or commercial contracts and may
include a waiver of the right to bring a class action claim. Mandatory consumer and
employment arbitration should be distinguished from consensual arbitration, particularly
commercial arbitration.
Negotiation comes from the Latin neg (no) and otsia (leisure) referring to businessmen who,
unlike the patricians, had no leisure time in their industriousness; it held the meaning of
business (le négoce in French) until the 17th century when it took on the diplomatic
connotation as a dialogue between two or more people or parties intended to reach a
beneficial outcome over one or more issues where a conflict exists with respect to at least one
of these issues.[1][2] Thus, negotiation is a process of combining divergent positions into a
joint agreement under a decision rule of unanimity.

It is aimed to resolve points of difference, to gain advantage for an individual or collective, or


to craft outcomes to satisfy various interests. It is often conducted by putting forward a
position and making concessions to achieve an agreement. The degree to which the
negotiating parties trust each other to implement the negotiated solution is a major factor in
determining whether negotiations are successful.