Asian Business Case Competition | ABCC 2011
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ABCC 2011

Daiichi Sankyo’s Acquisition of Ranbaxy

Case Title: Daiichi Sankyo’s Acquisition of Ranbaxy – Cultural Issues in Integrating Business Models and Organisations

 

Author(s): Wee Beng Geok, Geraldine Chen & Ivy Buche

 

Abstract: When Daiichi Sankyo, an established Japanese pharmaceutical firm, acquired the majority stake in Ranbaxy, India’s largest generic drug company, it signalled a move into uncharted territory. Daiichi Sankyo was the first Japanese innovator drug company to acquire the majority share in a global generic drug manufacturer and exporter. In doing so, it had entered into the generic drug business, which operated on very different premises from the large multinational firms that dominated the global pharmaceutical industry. Furthermore Daiichi Sankyo was acquiring another Asian company, which had emerged from very different national cultural roots and corporate history. This presented a new dimension in the management of change arising from a major acquisition initiative. The case examines the rationale for the acquisition; its immediate aftermath and the cross-cultural challenges ahead for the leadership of both companies as they work to implement a new hybrid business model.