Abstract

The case is about Wockhardt Limited, a leading pharmaceutical company in India, and the regulatory hurdles it has been facing since mid-2013. The case describes the growth of the company in detail. It also highlights its financial problems in 2008-09 and the successful financial restructuring of the company. In mid-2013, the company found itself mired in regulatory problems when the USFDA banned imports form its manufacturing facilities at Waluj, Aurangabad, in Maharashtra, Western India, citing violation of good manufacturing practices. Later, imports from its Chikalthana unit in Aurangabad were also subject to a USFDA ban. These import bans effectively stopped Wockhatdt’s exports to the US and cost the company millions of dollars in sales. The company’s Waluj plant also received warnings from the UK’s MHRA. The MHRA even withdrew the Good Manufacturing Practice (GMP) certificate awarded to Wockhardt’s Chikalthana and Kadaiya (in Daman and Diu) plants. The case highlights the consequences of these regulatory problems for Wockhardt. While some analysts felt that these regulatory issues were lessons for Wockhardt to improve its manufacturing practices, some industry experts opined that India’s growing generic business in the US could be the reason for the increasing regulatory hurdles faced by Indian pharma companies. The case ends with a discussion on Wockhardt’s future strategy to overcome the regulatory hurdles.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Analyze the strategies adopted by Wockhardt to become a global company by using a low cost advantage
• Understand the issues and challenges faced by an Indian pharmaceutical company in growing its business in the international market.
• Understand the importance of operations in sustaining a business strategy.
• Identify the reasons for the regulatory problems faced by Wockhardt

Keywords

Globalization, International strategy, Industry analysis, PESTEL, Porter's diamond, Business-level strategy, Competitive strategy, Cost Leadership, ‘Strategy clock', Low price strategy, Strategy and Operations, Quality issues, Pharmaceuticals, Turnaround