In Quest of Competitive Advantage in Unpredictable Environments: The Ascension of Zydus Cadila in the Indian Pharmaceutical Industry

Abstract

The introduction of product patent regime in 2005 has forced the firms in the Indian Pharmaceutical Industry (IPI) to rethink their sources of competitive advantage. The absence of an appropriate funding mechanism through the Indian government and the acquisition of Indian pharmaceutical firms by MNCs have added to the woes. This research mainly examines how firms in the IPI would generate competitive advantage and superior performance in such a scenario. Using case study research, this study investigates:• What are the key capabilities of the firm and how do they contribute to superior performance?• What role does strategic leadership play in the firm and how do they contribute to superior performance?• What are the emergent strategies of the firm?• Is support of government critical for survival and growth?• Is the firm having competitive advantage i.e. superior performance?The unit of analysis was the firm’s strategic leadership, key resources, capabilities and core competencies, competitive advantage and emergent strategies in the product patent regime of the IPI. One firm i.e. Zydus Cadila was selected for the study. The firm was Ahmedabad based and represented the case of a large firm with a turnover of over 1 billion dollars globally and among the top 5 firms in the IPI.On the whole, this research study may be useful to managers and policy makers by proposing that building capabilities in key areas through effective strategic leadership to meet market challenges in a more viable strategy in the new patent regime. The success of firms would depend on their ability to experiment, to learn quickly from mistakes, and reconfigure their capabilities to explore new opportunities in a rapidly changing IPI.