Globalization has led to the expansion of businesses with foreign investments being one of the main means businesses use to gain competitive advantage. A lot of studies have been carried out on the best business strategies corporations should use in order to gain a competitive edge in the global market.
Most of these studies however are modeled after American and the United Kingdom’s approach to business. D Jane Bower and Julian C. Sulez wrote a working paper for the Innogen corporation titled “The Indian Challenge: The Evolution of a Successful New Global Strategy in the Pharmaceutical Industry”.
The paper explores the manner in which Indian companies have deviated from the norms of business strategy and still maintain their competitive advantage. The paper is of particular importance as it explores global business strategies and the need for non-conformity.
The article’s main focus is the evolution of a new business strategy used by several Indian pharmaceutical companies that have had significant success both in the United Kingdom and the United States. The article hypothesizes that due to the different approach in business strategy employed by Indian and Chinese companies, companies in the West may be blindsided.
The article is well written with good grammar and avoidance of spelling mistakes. The article however does not offer a valid argument to support the main hypothesis. Bower and Suarez (2007) identified three main steps in business strategy that was meant to summarize the business strategy employed by these Indian pharmaceutical companies.
The three steps are however the most common strategy for small scale and upcoming business enterprises and they are: Investing in the home market, investing in the international market after succeeding in the home market, and finally investing in research and development to maintain competitive advantage in the global market.
Bower and Suarez (2007) also present reasons why the companies are succeeding in the Western markets. The reasons provided have nothing to do with business strategy and are only about rules and regulations that have enabled these companies to perform well. The only strategy that can be easily identified is the investment in generic drugs produced at a cheap price.
Generic drugs are mainly copies of original drugs that are produced by pharmaceutical companies. Indian companies thus invest in learning about new drugs that are produced after which they produce generics that are of equal quality, strength and dosage. This strategy has worked because these companies do not have to do an extensive research on producing new drugs since the drug has already been produced for them.
While the paper proposes a valid argument, it is not truly objective as it does not discuss the western strategies that these Indian companies have deviated from. In my perspective, the Indian companies have been able to gain a competitive advantage because they flood the Western market with generic drugs hoping that someone will buy them.
Most Western companies do not deal with generic drugs; in fact most are against them. Government regulation and inaccessibility to drugs has thus played a major role in promoting the competitive advantage of these businesses.
To be truly objective, the writers of this article should ensure that they present a true description of this business model that does not leave room to question whether other factors are responsible for the success of these Indian firms. The writers did not do a good job in presenting and arguing their ideas as they only concentrated on one point leaving a lot of questions unanswered.
Bower, J & Sulez, J. (2007). The Indian Challenge: The Evolution of a Successful New Global Strategy in the Pharmaceutical Industry. Technology Analysis & Strategic Management, 19(5): 611-624