Case Study

Health for all: Dr. Reddy’s Laboratories and rural India (A)

14 pages
December 2015
Reference: IMD-7-1748

This two-part case series is set in India and examines the challenges encountered by a leading Indian pharmaceutical company, Dr. Reddy’s Laboratories (DRL), following its strategic decision to create Indura – a business unit dedicated to the rural market. In recent years, the strategic direction set by the new CEO and his “Health for All” vision has shifted the company’s attention to its domestic market and the rural areas of the country. The case focuses on the implementation hurdles of such a vision and invites business executives to explore the role of strategy in building ecosystems that are essential for successful strategy implementation. Case A sets the scene by describing the business model of pharmaceutical companies in India and the rationale behind DRL’s decision to pursue an alternative growth avenue. It presents the Indura project, which takes the company to rural markets. Given its large size and growth potential, rural India seems to offer a fascinating opportunity to DRL. The case highlights the unique obstacles Indura faced in its effort to access rural customers and concludes by putting the spotlight on the sustainability question: Can DRL translate its “Health for All” vision into a sustainable business model? Case B is a brief follow-on case that presents key actions taken by DRL’s management during the period 2013–2015. Alok Sonig, the newly appointed leader of the India business, together with his direct report Rajaram Bagayatkar, changed the name of the unit to Pride and adopted a new plan of action, which focused on motivating the sales force. While this addressed most of the challenges, some issues remained. Case B invites participants to go beyond DRL management’s actions and explore possible ways to leverage technology and social media and innovative approaches to address both the access and talent challenges.

Learning Objective

Highlight the healthcare needs in rural areas of an emerging country like India and the rationale for businesses to consider these as potential markets. Understand the unique distribution and human resources challenges posed by rural markets in emerging countries. Identify the pillars of a sustainable strategy for companies willing to invest in bringing innovation to rural areas.

Keywords
Emerging Market, Turnaround Strategy, Rural Market
Settings
Asia, India
Dr Reddy’s Laboratories, Healthcare, Pharmaceuticals
2009-2015
Type
Field Research
Copyright
© 2015
Available Languages
English
Related material
Teaching note, Video
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