Anubhav Case Study
Aditya G.K.
Competition MBA (HR)
SCMHRD
Building a winning formulation: The turnaround
story of Ajanta Pharma
Dynamic Turnaround
Innovative
Case objectives
Management students Corporate strategists (in
Audience
Academicians manufacturing)
Changing vision for long term Product differentiation
growth
Key learnings
Successfully exploiting niche Investing in human capital
markets
Theory Implementing blue ocean strategy
perspective
Zimmerman’s 1989 model on business turnaround
SWOT Analysis of Indian Pharma Industry
Strengths Weaknesses
Robust growth resulting in increased disposable income There is lack of health insurance
Cost competitiveness due to stiff competition There is strict regulation controlling the price
Skilled labor available at a lower cost Bottlenecks in prevalent infrastructure
Opportunities Threats
Increase spending on medicines due to unhealthy diet and
Unregulated market
increased life expectancy
Growing demand for generics Stiff competition from other emerging countries
Rapid growth in Tier 2 and tier 3 cities Fake counterparts
Ajanta Pharma by 2000
Following Government
traditional contracts 30% of
Pharma cos business
Majority
government
Slow growth contracts for
125 crore institutional
debt/1.09 sales
crore
annual loss
Building the winning formula
Tapping new
Strategic vision Investment Human Capital
markets
• Discontinued • Built new R&D • Increased • 3S model- Skill,
old business centres and spending on Share and
• Identified plants health in India Speed
strength • Spent more • Expanded to • CLP@Ajanta
catering to than Africa, • Exposure of
niche market competitors on Philippines and execs to top B-
• Provided end- R&D U.S.A. schools
to-end support • Introduced • Social sporting
in that space multiple events
products in
short period of
time
The Results
Net-debt free company by 2015
1816% in shareholder return
30% on sales growth
41% in return on equity
Listed as a Fortune 500 company,
Forbes India’s Super 50 Companies 3rd largest wealth creator in
last 5 years
Yogesh and Rajesh Agrawal awarded TIME India’s Yogesh Agrawal listed as ‘India’s Most
‘Young Maker of the Year’ Award by the PM Modi Valuable CEO’ in mid-size companies’
category by Business World
2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016-2017
2010 2011 2012 2013 2014 2015 2016
Profit
34 50.71 77.27 112.11 233.9 309.84 401.41 506.83
(Consolidated)
R&D spending (in
21.96 47.87 39.54 46.24 58.73 77.8 149.33 195.92
crores)
Return on
NA 2.31 1.61 2.84 5.06 5.28 5.16 3.39
Research Capital
Challenges for Ajanta Pharma in the future
Case Questions
Why did Ajanta Pharma become redundant over time? Why do organizations
die over time?
Discuss the turnaround process that helped Ajanta Pharma transform into a
high performing company today?
Based on the list of challenges that was assembled by Ajanta Pharma, what
actions should they take to insure their future and avoid becoming redundant?
Recommended readings
Blue Ocean Strategy (W. Chan Kim & Renee Mauborgne)
The innovator's dilemma (Clayton M. Christensen)
study
case
Creating a thought
experiment where
the Ajanta Pharma loses it’s
Discussing the case and position to competitors.
Getting students to
Teaching getting the groups to
identify what their discuss the possible
Getting the groups to companies could learn reasons for that.
discuss and identify from Ajanta Pharma Bringing in principles for
some common factors ‘innovator’s dilemma’ for
Putting students in which enabled the discussion.
groups of five and turnaround
getting them to discuss
about any one company
which they felt has
turned around
Not more than fifteen minute discussions
Groups can keep changing if possible
