Winning in the Green Frenzy: 1. Can sustainability or green issues be used as a source of a competitive advantage for organizations?

Explain with examples the advantages and disadvantages of trying to follow the green strategy in the Indian Market. Ans. Sustainability has become a key business issue for consumer product companies. They recognize that in order to remain competitive they must shift to meet the changing demands of consumers and of the environment. To do this, businesses are taking a critical look at their supply chains and determining how they can produce better products that have a reduced impact on the environment and can still deliver on their brand promise. Some of the ways this is being done include responsible raw material sourcing, more efficient manufacturing processes and reduced, reusable or recyclable packaging materials to cut waste to landfills. Companies are also beginning to highlight such innovations on their product packaging to promote their commitment to environmental stewardship and gain loyalty from like-minded consumers. These are some of the examples of innovative green products in US,

If someone needs a light bulb, they can consider the Marathon brand from Philips. A compact fluorescent light bulb that comes with a $15 price tag but would

1 |Page

save them approximately $26 over its lifetime while sparing them the hassle of changing bubs, especially appreciated in hard to reach places. If someone wants cleaner clothes, they can try some of the front-loading washers that are now on the market these days thanks to Department of Energy regulations requiring higher levels of energy and water efficiency. Chances are the one they buy will not only have the same capacity as their top loader, it leaves their clothes clean and bright; and since it wont agitate the wash load, without the prospect of a shortened life, too. If someone drives fewer than 7500 miles per year, they can look forward to saving thousands of dollars annually by joining one of the 25 car sharing services that have sprung up around the U.S.A time-sharing concept for cars imported from the Netherlands, such services lets them borrow any type of vehicle to suit the particular need of your driving occasion a van for moving, a sporty small car for running errands around town. This concept innovation represents only one of the possible new business models that green-inspired innovation can bring.

In India, around 25% of the consumers prefer environmental-friendly products, and around 28% may be considered healthy conscious. Therefore, green marketers have diverse and fairly sizeable segments to cater to. The Surf Excel detergent which saves water (advertised with the message"do bucket paani roz bachana") and the energy-saving LG consumers durables
2 |Page

are examples of green marketing. We also have green buildings which are efficient in their use of energy, water and construction materials, and which reduce the impact on human health and the environment through better design, construction, operation, maintenance and waste disposal. In India, the green building movement, spearheaded by the Confederation of Indian industry (CII) - Godrej Green business Center, has gained tremendous impetus over the last few years. From 20,000 sq ft in 2003, India's green building footprint is now over 25 million sq ft. But the major disadvantage of this is changing the habit of the consumers because these products are generally thought of as costly which results in going in for the conventional products. Many organizations want to turn green, as an increasing number of consumers' want to associate themselves with environmental-friendly products. Alongside, one also witnesses confusion among the consumers regarding the products. In particular, one often finds distrust regarding the credibility of green products. Therefore, to ensure consumer confidence, marketers of green products need to be much more transparent, and refrain from breaching any law or standards relating to products or business practices.

3 |Page

2. Using the matrix given in the case, illustrate 2 examples of organizations in each quadrant. Ans. Quadrant Define: Wipro's Green Machines (In India Only): Wipro Infotech was India's first company to launch environment friendly computer peripherals. For the Indian market, Wipro has launched a new range of desktops and laptops called Wipro Greenware. These products are RoHS (Restriction of Hazardous Substances) compliant thus reducing e-waste in the environment. Going Green (Tata's new mantra): The ideal global benchmark though is 1.5. Tata Motors is setting up an eco-friendly showroom using natural building material for its flooring and energy efficient lights. Tata Motors said the project is at a preliminary stage. The Indian Hotels Company, which runs the Taj chain, is in the process of creating eco rooms which will have energy efficient mini bars, organic bed linen and napkins made from recycled paper. But there won't be any carpets since chemicals are used to clean those. And when it comes to illumination, the rooms will have CFLs or LEDs. About 5% of the total rooms at a Taj hotel would sport a chic eco-room design. One of the most interesting innovations has come in the form of a biogas-based power plant at Taj Green Cove in Kovalam, which uses the waste generated at the hotel to meet its cooking requirements. Another eco friendly consumer product that is in the works is
4 |Page

Indica EV, an electric car that will run on polymer lithium ion batteries. Tata Motors plans to introduce the Indica EV in select European markets this year. Quadrant Co-Opt: Tata Metaliks Limited (TML): Every day is Environment Day at TML, one of the top green firms in India. A practical example that made everyone sit up and take notice is the companys policy to discourage working on Saturdays at the corporate office. Lights are also switched off during the day with the entire office depending on sunlight. Tamil Nadu Newsprint and Papers Limited (TNPL): The initiatives undertaken by this top green firm in India includes two Clean Development Mechanism projects and a wind farm project that helped generate 2,30,323 Carbon Emission Reductions earning Rs. 17.40 Crore. Quadrant Adopt: IndusInd Bank: Green banking has been catching up as among the top Indian green initiatives ever since IndusInd opened the countrys first solar-powered ATM and pioneered an eco-savvy change in the Indian banking sector. The bank is planning for more such initiatives in addressing the challenges of climate change. ITC Limited: ITC strengthened their commitment to green technologies by introducing ozone-treated elemental
5 |Page

chlorine free bleaching technology for the first time in India. The result is an entire new range of top green products and solutions, the environmentally friendly multi-purpose paper that is less polluting than its traditional counterpart. Quadrant Break Away: Oil and Natural Gas Company (ONGC): Indias largest oil producer, ONGC, is all set to lead the list of top 10 green Indian companies with energyefficient, green crematoriums that will soon replace the traditional wooden pyre across the country. ONGCs Mokshada Green Cremation initiative will save 60 to 70% of wood and a fourth of the burning time per cremation. IDEA Cellular: One of the best Indian companies, IDEA, paints India green with its national Use Mobile, Save Paper campaign. The company had organized Green Pledge campaigns at Indian cities where thousands came forward and pledged to save paper and trees. IDEA has also set up bus shelters with potted plants and tendril climbers to convey the green message.

The Global Pharmaceutical Industry:

6 |Page

1. Identify the main environmental factors currently affecting the pharmaceutical industry. What are the likely implications of the changing business environment on pharmaceutical firms? Ans. There is evidence of transference of marketing across countries. Marketing health products directly to consumers includes leveraging established distribution channels as well as creating new ones through the Internet. There is evidence of cost advantages and economies of scale. The recent trend of mergers exploited potential cost advantages to be found in R&D facilities serving global operations. This reflects the fact that R&D capabilities have been and will continue to be critical in determining the structure of the industry. Cost savings were also realized in head office and local company infrastructures. There is evidence of interdependence encouraging the globalization of competitors. For instance, big pharmaceuticals are investors in the biggest biotechnology companies. Firms also make their marketing skills and capacity available to smaller players including those from abroad (particularly to enter the US and Japanese markets). Another example involves firms specializing in offering multi-country clinical trials. At the same time, there are factors reducing possibilities for convergence. For instance, political, economic and legal considerations prevent globalization extending to all
7 |Page

therapy classes and geographic markets. At face value, most major companies appear to be truly global as are major therapy classes. Indeed, big pharmaceuticals have manufacturing and distribution capabilities across the globe. However, their profitability (and R&D efforts) are contingent on developments (and ailments) in the US, Western European countries and Japan. As a result smaller domestic and regional players do still exist; diseases common to Third World countries are under-researched and overall market share remains low (Pfizer only had 11% of total sales in 2003). But again low concentration disguises that, through patent protection, big pharmaceuticals dominate the most profitable market segments. There has been a shift in consumer behavior and attitudes of governments towards healthcare costs in general and pharmaceuticals in particular. This shift emphasizes value for money and is very much rooted on country specific methods to manage competition in health care provision. Parallel trade will continue to be a significant issue because of the role of governments in setting prices and reimbursement policies, resulting in significant pricing disparities that are likely to remain entrenched. Moreover, the differential impact of key environmental influences on ethical pharmaceuticals has raised the
8 |Page

question of what is the optimal size for a pharmaceutical company, particularly in marketing and research terms. The entry of biotechnology companies and the trend to contract out clinical research suggests that some researchbased companies are focusing on global sales and marketing competences and using their global presence and marketing skill to attract products from biotechnology or University research sectors. For the generic manufacturer size has become critical because during the late 1990s there was a collapse of generics prices in the US, resulting in a shake-out to identify cost leadership. Manufacturers of generics thus faced a classic stalemate type environment where economies of scale prove decisive. Outsourcing of manufacturing together with the contracting of R&D to biotech and licensing agreements resulted in most major companies developing competences in alliance management. A key feature of branded over-the-counter (OTC) drugs has been the development of direct-to-consumer marketing capabilities.

2. What are the key growth drivers of the pharma industry in India? What would your
9 |Page

recommendations Players?

be

for

the

Indian

Pharma

Ans. Asia-Pacific region is emerging as the fastest growing pharmaceutical market in recent years. Indian Pharma business is emerging as a global powerhouse with rich pipeline of various products, is becoming 3rd Pharma super power in the international level, despite the current economic slowdown pharmaceutical R&D is increasing mode in India. The Indian pharmaceutical companies export their products (Drug intermediates, APIs, Finished Dosage Formulations, Bio Pharmaceuticals) to more than 200 countries around the world (including highly regulated markets of USA, West Europe, Japan and Australia). 40% of the worlds bulk drug requirement is met by India. As multiple global segments are available for Indian Pharma companies: Such as Pharma manufacturing, drug discovery, research, clinical outsourcing, marketing, and etc Growth Drivers

Increasing drug R&D costs in compared to India Enhanced healthcare investments in developing countries Healthcare reimbursement issues in the U.S. and Europe

10 | P a g e

Scientific breakthroughs in genomics and proteomics Increasing cost and commercialization pressures in other nations WTO patented for cements, and several other industry dynamics

With the increased presence of multinational companies, the Indian pharmaceutical sector is flourishing with multiple opportunities, even the Indian companies are revamping their R&D facilities to comply with World Trade Organizations Trade Related Aspects of Intellectual Property Rights (WTO-TRIPS) agreement and recognized product patents with the amendment of the Indian Patent Act in January 2005. India is also set to become global hub for clinical trials sector. Today India is the most favored destination, fast becoming a signification hub for conducting global clinical trials, contract research, and bio-technology. In terms of cost efficiency India is better, as the cost of conducting a trial here is lower by 50-60% than in the United States or the European Union. India is currently accredited as the global pharmacy of the developing world and has attained cost-competitive manufacturing capabilities to provide quality medicines at lower costs, in the last few years Indian pharmaceutical industry has shown tremendous growth in terms of
11 | P a g e

infrastructure development, technology base creation, and production of a wide range of therapeutic products. Recommendations: The industry has thrived so far on reverse engineering skills exploiting the lack of process patent in the country. This has resulted in the Indian pharmaceutical players offering their products at some of the lowest prices in the world. The quality of the products is reflected in the fact that India has the highest number of manufacturing plants approved by US FDA, which is next only to that in the US. Multinational companies have traditionally dominated the industry, which is another trend seeing a reversal. Currently, it is the Indian companies which are dominating the marketplace with the local players dominating a number of key therapeutic segments. The market is also very fragmented with about 30,000 entities and the organized sector consisting of about 300 entities. Consolidation is increasing in the industry with many local players building a global outlook and also growing inorganically through mergers and acquisitions. So, they should venture developing blockbuster drugs which would allow them to enter the global market and also the government should give emphasis and provide funds for such developments.

By: Abhishek Mishra

12 | P a g e

Shashikant Jajal Shivani Kavadiya Gaurav Gupta

13 | P a g e