Mapping the transnationalization of select Indian herbal drug companies

Abstract

The Global Herbal industry is estimated to be worth US $ 60 Billion and India's share is less than US $ 1 Billion. Specific trends like shift from managed healthcare to 'wellbeing' has resulted in the Herbal market growing at 25% compared to 6% for the allopathic or modem medicine. This project attempts to analyze the rapid transnationalization of a few Indian herbal drug companies and look at their entry strategies and challenges. The focus is primarily from the strategy perspective. As the Indian companies become transnational corporations, it is important to develop several subsidiaries as 'strategic leaders' for different aspects. Currently only Sami Labs seem to have made some progress in this direction. Currently all the companies studied exhibit more of 'Global' characteristics than the other Organizational types. Ranbaxy has made a phenomenal transformation into research-based international Pharma company. Currently it has just made a beginning with its 'New Age Herbals' offering and treating herbals as an extension of its OTC products. It remains to be seen what sort of an organizational resolve and will is needed for it to succeed in the field of herbal medicine. The three main challenges faced during the entry into newer markets are compliance with regulations, the need to educate consumers and practitioners and the need to find reliable channel partners/distributors etc. Mapping the Transnationalization of select Indian herbal drug companies There is a common foreign market entry strategy adopted by Indian herbal companies to learn and overcome regulatory barriers. This involves first entering with OTe personal care products and herbal supplements, then also offer individual herbs and extracts, then Animal health products and services and later move towards offering therapeutic remedies. There's no shortcut to profitable, sustained growth, other than through original research, IP protection, quality control and practice of Good Manufacturing Practices (GMP),Good Laboratory Practices (GLP) etc, stringent adherence to regulations and brand building.