Strategic Management Analysis of Biocon India Group Limited

The development of a country mainly depends on the increasing number of industries and their success. This article is focused on the Strategic Management Analysis of Biocon India Group Limited. All types of industries and cottage firms are part of the country’s development. In this case, the Indian pharmaceutical industry has created mentionable changes in the economy. From 1947 this industry started its journey. Initially, the local market was dominated by Europe and the United States (, 2019). With the increasing population, the market for pharmaceutical products has needed to expand in the global economy market. Starting with the 21st century, around 20,000 pharmaceutical companies were started their operation in India.

Strategic Management Analysis of Biocon India Group Limited

Strategic Management Analysis of Biocon India

From the beginning of the journey of the pharmaceuticals, clinical trials considered the most expensive part of the drug development chain. There was an emerging condition of making it prime targets for outsourcing to India (, 2019). On the other hand, remarkable growth development of the medical biotech industry had been recognized by the Indian government. As a result, the government had taken dynamic steps like creating the department of Biotechnology within the Ministry of Science and Technology, building international standard biotech parks, particularly in the R&D and biotech fields. During this time, the Biocon India group established by Kiran Mazumder shaw as a joint venture with Biocon Ireland started their journey to wholesale manufactured enzymes. This company got several achievements in the lifetime of its journey. In 1989 it became the first Indian Biotech company to practice the US money for patented technologies. Recently the Biocon group introduce a new subsidiary which is named Clinigene.

Clinigene was launched in 2000 by the Biocon group as a subsidiary. A broad range of clinical services had to conduct to start their business. To conduct this research Biocon needed a large number of expertise, capitals and also favorable circumstances (, 2019). So for overall circumstances, Biocon needed to make some critical decisions for the organization and future planning process.

Literature Review

India’s pharmaceutical industry has expanded its sphere in the last three decades. The country became the world’s third-largest producer of drugs for the volume of production. The industry has posted a rise in the US $36.7 Billion in 2017 and expected to grow at the US $55 Billion by 2020. India is now considered to be the top five pharmaceutical emerging markets of the world (GUPTA, 2019).

India’s exports of generic drugs increased at a very impressive rate of 24% from the last four years and more than half of covered the highly-regulated western markets of the world. This can provide an idea about the volumes production and the better efficiency of the Indian pharma sector from the perspective of quality and pricing. It is the second-largest export market for Africa, then Europe. Next, the market is targeting to expand its services to Latin America, Australia, Japan.

According to the UNICEF Supply, Annual Report India is the world’s largest supplier of generics for facilitating affordable access to poor patients with various life-saving medicines. Due to the increased ability of the Indian pharma companies the cost of HIV/AIDS treatment has gone down to $400 per year from $12,000 with is a great achievement for global healthcare (Jeyarathmm, 2008).

Strategic analysis on how the cultural issues of the company faced:

The success of Clinigene mostly depends on the strategic planning of the Biocon group, as it is the new subsidiary of this group and the success of this new subsidiary indicates future profitability. Five major key growth verticals are followed by the Biocon group and they are Small Particles (APIs), Biosimilars, Branded Formulations, Novel Particles and Research Facilities (Ellson, 2004). All of these five items worked for the growth of the company and minimize the competition in the industry.

Strategic challenges faced by the owner:

  • Set up a new subsidiary: To set up a new subsidiary is not easy. Kiran Shaw has to face financial, credibility, gender bias, infrastructure, and resource availability challenges. She wanted to sustain the clinigene in the market place as external clients in the CRO business. Even after the two years of its establishment, there were some challenges like market positioning, future market risk, adaptation indifferent culture publicity as well as ethics and so on (Malek, Rasquinha and Vacani, 1993).
  • Market opportunity: With the increasing demand of people, the expansion of clinical research in India has started to launch, and burst out during the next decade. Contract research organizations (CROs) have been played here as a key player in this market. And the growth rate of this market is also mentioned. Higher potential growth of this market may show the high opportunity of making a favorable place in the market but the other MNCs presence there may indicate a risk to survive there with a good position, as Clinigene now positions in low to medium range categories (Newth, 2012).
  • Little or no direct experience of the market: As Clinigene was the new innovation of Biocon India Group it could be an enormous distraction for the organization and its clients as well. It was also responsible for consuming precious resources in an area in which Biocon had very little direct experience. This kind of starting can be very risky for any organization. Biocon never thought about what kind of outcome will they receive from the market (Piroddi et al., 2019). Will that be positive or negative for the organization in the long run. If Clinigene did prove profitable, its very success can bring them Pyrrhic victory. The subsidiary also had the capability of rapidly outgrowing its parent and damage the company’s collaborative culture in the long run. If Biocon did not choose to pursue the promise of Clinigene, it could get trapped forever in the competitive generic pharmaceuticals market which was not expected by the company. It can also decrease their possibility of unable to work on their potential of becoming an innovator.
  • Organizational Culture: Clinigene might possibly develop to a size that has outdone from Biocon and Syngene. For this large site time and capital, the requirement is also high. Besides large numbers of employees, new organization designs, procedures for introduction are needed. Additionally, partner hospitals help to do the trails that are needed to for this type of new organization. Actually isolated among trial sites, rarely able to mooch the strips Biocon’s services, the Clinigene employees could dissatisfy in this trial session or they are only loyal to the parent company rather than Clinigene (, 2019).
  • Publicity and Ethics: This is the mode of communication with the target customers by providing necessary information through advisement. The importance of this term is much as the financial loss may occur because of failing clinical trial and compensation to victims. By using media Biocon group receives so much popularity and in the case of publicity of a subsidiary through clinical trial may get a negative result as it is a most populated country. It becomes a great question for the illiterate and poor people. The trial session could get negative and destructive attention from the media based on the impact on society and human. They may not take clinical trial sessions easily and in a welcoming way (Reporter, 2019). The organization can also face the accusation of neocolonial imperialism, foreign exploitation, and subjugation to the West to destroy their business in any way.

How the central issues were dealt with

The central issues were some significant consideration to provide for the organization. Biocon needs to deal with different kinds of factors to adopt their strategies with the culture and society of India and some special consideration was also given to some factors. All of them are described below:

  • Established Brand image and improved market condition: With the successful launch of a new subsidiary Clinigene, Biocon India started its new journey. In such a conservative pharmaceuticals market it was a challenge to survive successfully with offering a broad range of clinical trial services, drug development processes based on two different areas in different types of clinical studies (Rothaermel, n.d.). Generally, generic drugs and off-patent original drugs just need to pass the bio-equivalence and bio-availability (BE/BA) clinical studies whereas, for new drugs, more elaborate clinical trials were required. So they focused on clinical lab services, BE/BA studies with the concentrated partnership coordination study for clinical tests with hospitals. The Clingene was capable to fulfill the missing gap of drug discovery and development value chain of the pharmaceuticals industry.
  • Taking precautions from the threats of pharmaceuticals giants: The high growth potential can be very helpful for the better opportunities of Clinigene to reap revenues from the market. According to the research, the growth potential of CRO’s in the Indian market is pretty high. Clinigene’s current position is in the low-to medium-value segment based on the value chain. By moving up in the value chain can more profitable for the organization and the subsidiary as well in the long run. But it can increase a significant level of financial and cultural cost of the company. Some pharmaceutical MNCs of the industry rely on outsourcing for many critical and sensitive tasks which are not really common in the Indian industry (White, 2004). The foreign CROs, focusing on in-house data management centers and concentrating on serving the higher-value needs of the customers. So the Clinigene need to focus on increasing their value chain position and also concentrate on market share improvement with a healthy competition of Pharmaceuticals industry.
  • Taking benefits of Success and removing cultural dilemma: Biocon India Group can become a victim of Clinigene’s success. With the significant slice of a growing market for Clinigene can overshadow the contribution of Biocon and Syngene. The aggressive growth can ask for diversion of time and resources within the company and their policymaking process. It can also impact on the new employee’s recruitment and less time to redesign the Biocon culture (Jones and Hill, 2013). In the loose structures and casual hierarchies, Biocon can damage their organizational culture in the process. Moreover adaptation of the new structure and culture design can be a great challenge for the organization. So to solve the overall problems the organization need to promote their other established sectors too. The organization can find some loyal employee base towards the parent company as well as the subsidiary. They also need to provide training and adopt the organizational culture that blends in the Biocon setup.
  • Removing Social Issues: Clinical trials dealt with humans, which was very can increase different problems from multiple dimensions. There could be financial losses because of failed clinical trials, complicated compensation processes to victims and also questionable ethical challenges for employees. The process of innovation also could damage the reputation of the organization and could be very critical for organizational survival. It could raise a question on the impact of humans and society. So they tried to keep their profile low and steady (Google Books, 2019). The organization can also follow the rules and regulations given by the government to keep its media controversy clean. Biocon also should focus on the movement of media and the western pharmaceuticals to prevent their ill intentions towards the path of innovation and betterment of the pharmaceutical industry.

Strategy for expansion likely to be

  • To maintain the market and make sure sustainability, at first need to figure out a policy framework for the next one year period.
  • To get a substantial workforce in the market, they need to recruit qualified people for the organization.
  • Making proper scope for a clinical trial project for the existing employees.
  • Maintain clinical trial law and teach the employees about it.

Using of strategic models and theories to solve the central issues and showing how these were deployed in the emergent strategies

The central issues of this company may be dealt with by using different kinds of models and theories. Among them, Porter’s Generic Strategies is one of the most suitable models for the process. Four types of strategies can be used from the model to get the desired result and use the model efficiently. They are cost leadership (no additions), cost focus (creating a differently specified product for a niche market), differentiation (make exceptionally accepted products or services) leadership and differentiation focus (Woroch, 1990). These fours are created from two bases and they are vertically used sources of competitive advantages and horizontally markets where business competes. For the better discussion about them from the Biocon organizational perspective and their successful implementation of the subsidiary Clinigene’s following process can be taken into account.

  • Cost leadership: One may get a cost leadership strategy by increasing profit through reducing costs and fixed the price according to the industry average prices. Besides increasing the market share another technique to be a cost leadership in the market (Smith et al., 2019). By this, you may target the mass people as your preferred customers.

Once one sets this strategy it may help to bring the cost down by setting access capital technology at the starting of the business and very well-organized logistics as well as can sustain in the competitive market in the long run.

  • Differentiation strategy: Organization needs to make an innovative product for the customers. Mass people are not targeted here. Only a group of people who have the same needs are served by the company. For this type of strategy a good research and innovation team to continuous research, create a high-quality product as well as need an effective sales and marketing team which ensures benefits offered by the differentiated products.

Large organizations following a differentiation strategy want to sustain in the by supplying their new product development practices (GUPTA, 2019). Otherwise, the threat outbreak on several faces by competitors following Focus Differentiation strategies in dissimilar market segments.

  • Focus Strategy: This strategy target a specific group of people called niche marketing. Being a strong brand in this market has to serve uniquely and try to hold their loyalty. Once one decided whether to go for cost leadership or differentiation marketing and he can choose focus strategy. As the focus is not generally enough on its own. To reduce cost something extra you can add to minimize the cost or by deeply searching you can provide a unique product according to the customer’s need.

After analyzing the overall scenario of Clinigene the Biocon SWOT analysis with provide us the best understanding of the focused section of the Indian pharmaceuticals industry. The organization needs to reduce its weaknesses and capabilities by increasing its strength and opportunities in the local market. Clinigene is a critical attempt of the Biocon India Group in such an unpredictable market place (Ghertman, Obadia and Arregle, 2011). The success or failure of the subsidiary can direct effect on the overall reputation and brand image of Biocon. So the company needs to take very careful attempts and cautious steps of progress from the external and internal potential problems. Thus, they are already in a better position compared to the other companies of the local market operating in the Indian pharmaceutical industry.

In 2000 Biocon India launched Clinigene to proceed for the clinical development and research progress. It pursued eventually to offer a broad variety of clinical trial services along with drag development span in two different zones that accordingly needed different kinds of clinical studies (Bureau, 2019). Conducting these studies needs a large market place and a high research and development team. So in porter’s generic strategy, this company falls both in the cost leadership and differentiation leadership categories. So based on the porter’s generic strategy factor the subsidiary needs to focus on both of the sectors to make their further efforts successful.

Demonstrate how the company achieved competitive advantage through their particular choice of strategic management.

The Biocon India Group is a very different and non-traditional pharmaceutical company in the Indian pharma industry. Their organizational structures and dimensions are quite unique and different from the traditional and typical organization of the Indian market. Their philosophy possesses the urge for continuous improvement and thirst for learning to make the future better. It is almost impossible to meet up the valuable standard and the position the organization set in the industry by continuous struggles and new innovation process (Betz, 2011). Each and every business strategy and unique choice of strategic management has gifted them with an excellent competitive advantage over their competitors which is beyond to reach.

Here the significant and praiseworthy strategic management choices of the organization are described to get a minimal idea about the competitive advantage they have achieved in the market. From the theoretical ideas of porter’s value chain analysis the competitive advantage is described below:

  • Less complicated organizational culture and structure: The organization promotes openness, trust, and collaboration among the employees. They have no hierarchy in their organizational structure. Anyone can communicate with any person without any specific appointments and hassle (Barney and Hesterly, n.d.). All of the employees were indulge in discussing ideas and exchanging views with colleagues from time to time. Accessibility to the information and any person whenever needed in the biggest advantage of the organization provided to the employees.
  • Valuation of the employees: The organization value people and their opinions for the betterment. The trustworthiness and credibility of the employees are the biggest blessings for the organization. They provide the employees with the best treatment to ease and adopt the culture of Biocon. The organization is investing in numerous comforting features such as special transportation systems, free lunch and snacks, health checkups and so on. The organization also focuses on the strongly meritocratic hiring and continuous improvement of its performance management system to foster excellence and reinforce collaboration of the achievements (, 2019).
  • Continuous improvement in quality management: Biocon thrives for improvement and has the attitude to better from each passing day. They have built their plants based on the solid-state process of fermentation learned from the Japanese company factories. The R&D team was successful to build a unique and subsequently patented fermentation reactor for the organization which has greatly simplified the fermentation process of the organization. Through this Biocon became able to create greater control over the process by reducing waste and inefficiency which was an extreme milestone of success for the organization.
  • Diverse market place and easy source of materials: Biocon’s competitive advantage has grown based on India’s large pool of scientists and professionals. All of them are well-educated and well-trained and cheap to use for the works. The cost of raw materials used for the ingredients of the pharmaceutical are easily in the local market. Also, it has a huge base of the basic raw materials for making medicines in cheap rates (Piroddi et al., 2019).

The population of the country is genetically diverse, which provides researchers to access ethnic genetic structures with a well-balanced group for clinical studies. They can be used as potential customers as well to sell their products. As clinical trials are the most expensive parts of the drug development process, so India is the perfect market to target as a business and production industry.

  • Government facilities: The Indian government had identified the potential growth and prospect of the medical biotech industry. So they have provided many internal and external supports to encourage the industry’s growth in the R&D and biotech facilities which was a great opportunity for Biocon to start their subsidiary named Clinigene (Piroddi et al., 2019). Some states of India have also eased tax, duty, and lease obligations for biotech parks in India.

So from the overall discussion, we can say that the Indian pharmaceutical market is very lucrative to expand its growth in the near future. So by understanding all the factors and considering the overall market condition, it can be said that the Biocon India Group has an inbuilt competitive advantage from their internal and external environment. They were capable to grab the opportunity of market expansion and the increasing success potential which has blessed them with a continuous competitive advantage from the extremely fruitful market mechanism.


This study is a descriptive study based on the new subsidiary, Clinigene, of Biocon India Group. The Indian pharmaceutical industry has a major impact on its economic growth and the development of the country’s GDP. There are many advantages and disadvantages to starting and operating a pharmaceuticals company in India.


  • High-quality workforces are available in India because there several renowned research institutions are available there. Those research institutions produce high-quality manpower every year.
  • Imposed two different patent laws in the 1970’s for the welfare of this industry.
  • The large population becomes an advantage of clinical trials in this country.
  • To make this industry lucrative subsidies on raw materials and procurement are imposed.
  • According to the volume, the Indian pharmaceutical industry ranked third in the world and 14th position in terms of value (Ellson, 2004).
  • India is popular for producing low-cost generic drugs. Besides here research and development cost is cheaper than any other country.


  • Patent law was not strictly followed. After some period it became deactivate.
  • The market is so much competition and around 20000 firms play their role in the market.
  • Clinical trials are not so easy because of ethical issues and media.
  • Threats of international companies as this market are so much lucrative because of low manufacturing cost and high-quality workforces (Ellson, 2004).
  • Price covers on drug and capital exhaustive other major disadvantages.

The attractiveness of the CRO market:

Contact Research organizations mainly do Research and development work of the business industry. India offers a very profitable market as well as an effective market instrument for the betterment of the company. Some organization offers higher value clinical trials at low cost.

Challenges faced by Clinigene:

  • Biocon introduced Clinigene as a subsidiary in 2000. After that clinical trials became major issues.
  • Huge financial support was needed to build up this firm in the competitive market place in India (Urs, 2019).
  • The risk was embedded in the establishment of the organization as future failure may occur which will make a huge loss for this group of companies.
  • Two types of service providing opportunities were available. One is a short term basis and another is a long term basis. The short-run business was safe whereas long term business consists of risks (Urs, 2019).
  • Introducing a different sector of business was challenging in this full of competitors’ market place.
  • Using cheaper technology and economic slowdown is another important challenge.

Porter’s generic strategy analysis:

After analyzing porter’s strategic model, some new ideas are found on Clinigene. And those are:

  • Clinigene covers a larger market through their clinical trials as well as providing better service to the country’s people with a cost which is 50 % less cost than that of Europe and China.
  • By using a high-quality workforce, Clinigene ensures a significant growth opportunity on rapidly rising subcontracted research services.
  • Being a cost leader by providing more services at a reasonable price to the target customers and getting a positive review from them (Jeyarathmm, 2008).
  • They don’t provide focus marketing as it can’t do anything itself. These strategies need to get help from other strategies.
  • By expanding its business Biocon group create diversification which minimizes the risk of this group of company (Jeyarathmm, 2008).
  • This firm mainly follows the cost leadership strategy as well as differentiation leadership. Both these two strategy helps to maintain the motive of the business very carefully.
  • To find out the place in the porter’s generic form SWOT analysis of this firm has to be done very cautiously.


Strategic management benefits a business organization by increasing the chance to form and accomplish definite goals through rational and planned footsteps. The Indian pharmaceutical sector has reached a position that became one of the best-organized zones for the whole world. The sustainable global pharmaceuticals industry is the creation of this industry. The expansion of the industry is very praiseworthy and lucrative for the future.

Biocon India Group Limited is a foremost part of this industry, and throughout the study, we have discussed the Indian pharmaceuticals industry, Biocon India Group and it is clinical subsidiary Clinigene (Malek, Rasquinha and Vacani, 1993). The strategic prospects of this association in the above-mentioned market have been estimated and various progress strategies have been advised based on the evaluation. All the criteria which are analyzed over this descriptive study, there are some lacking in this firm that should be minimized or removed from the firm as well as from the pharmaceutical industry. Proper steps should be taken for improving the current scenario. The steps are:

  • Patent laws should be imposed strictly to control the Indian pharmaceutical industry. Without the proper patent process, it is impossible to protect the better steps taken for the organization.
  • It is important to set up a major binding for international companies to do business in India. The industry needs to ensure the proper growth and expansion possibility for their local organizations. In this case, the government can impose higher taxes on MNCs to give more priority to the country’s pharmaceuticals industry (Malek, Rasquinha and Vacani, 1993).
  • The government can also impose some structural rules and regulations on the prevention of international organizations or pharmaceuticals to expand and take away the large portion of the market share.
  • Decreasing unethical issues and controls the media for not telecasting any fake or partially true news in the media. Because people are now much more dependent on social media.
  • As Cliniege is a risky project, here high risk may bring high profitability or may create a huge failure of the company, so the employer should have a backup plan to control the situation.
  • The company should always focus on using expensive or updated technology rather than cheaper or backdated technology. They should focus on the innovation process and always keep updating their system with the new subsidiary adaptation.
  • The organization should work for setting up a strong communication network throughout the business area to get reach the target customers and clients very easily.
  • Strategies that are followed by the group should be more specific, precise and detailed which will help to identify the current market position of the company and focus on the new strategy of increasing potential and future market access (Smith et al., 2019).
  • Biocon India Group needs to implement its value chain process seriously and keep the decentralized power process upgraded for the better management of the new subsidiary.
  • The internal control system mostly depends on the preparation and presentation of financial statements. So more internal control in needed places the company in the required position.
  • As in Clinigene Company, a large number of financial capitals are required and a large of employees also need for the continuation of the process, organizers should give a second thought over this industry (Smith et al., 2019). Because there is a good chance of failure of the organization that makes this firm to face a huge loss in the long run of the business.

Overall by following all the recommendations, it is possible to ensure the successful establishment and the management of the Clinigene subsidiary of Biocon India Group. By implementing all the possible measures and following them strictly can bring good luck to the pharmaceutical industry by avoiding any major downfall of the organization.


The whole process of Clinigene was a successful movement from the Biocon India Group. It was not only responsible for making money, attracting clients but also was filling the gaps in the Biocon India Group value chain. Though the subsidiary increased the risk from different perspectives such as embarrassment or failure, it also created a fear of swift success (Smith et al., 2019). The philosophy of “Earn as you learn” so far supported the organization in each and every step of progress. The overall concept was very fruitful for the pharmaceuticals’ success and their movement for the future.


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Written by

Md. Shadequr Rahaman

Email: [email protected]

Strategic Management Analysis of Biocon India Group Limited

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