Professional Documents
Culture Documents
The story of a 125 year company famous for its Pain management products
over time
Currently
AHCL had a turnover of around INR
890 Million in 2009, and was the
third largest player in the pain
balm category
A products offered by the company
include the following
• The Rubefacient market is around INR
4.43billion large with an annual growth at
8%
• AHCL tried to expand the business
through Inorganic growth strategy and
as part of that diversified in to various
unrelated businesses.
• The company had started Amurtanjan
wellness centers which dealt with pain
relieving products
• The company had forayed in to
Beverages and ready to eat segment
Rubefacient Market in
India (Overview)
Indian pharmaceutical industry - $4.5
billion in 2011, growing at 8 – 9%
annually
The pharma market consists of
prescribed drugs and over-the-counter
(OTC) drugs
The OTC pharma market was
estimated at $1.8 billion in 2009
The OTC pharma market is expected
to have a higher growth compared to
the overall pharma market
PHARMACEUTICAL
MARKET
PRESCRIBED OVER-THE-
DRUGS COUNTER DRUGS
ANALGESICS VITAMINS,
AND PAIN COUGH, COLD GASTRO-
MINERALS AND
RELIEVERS AND ALLERGY INTESTINAL
SUPPLEMENTS
RUBEFACIEN
T (BALMS
TABLETS
AND
OINMENTS)
The players in balm included Iodex- 16.5%, Zandu-36% and Amrutanjan-26.6% in the year
2008-09
OTC pharma Market growth
Diversification:
• Diversification is the art of entering product markets different from
those in which the firm is currently engaged in. It is helpful to divide
diversification into ‘related’ diversification and ‘unrelated’
diversification
• Risk reduction and growth are the 2 main motives for diversification
• Risk reduction: diversified risk across different products
• Growth: Avenues to achieve corporate growth in other
industries and markets.
Competitive advantages: Relating to diversification
Economies of scope:
• Tangible Resources( Distribution Networks, IT Systems, Sales Forces,
R&D Labs)
Strong distribution network in India
• 0.35 Million retailers, 1750 stockists promoting the
brand
• Export networks to middle east, Africa and neighboring
countries.
Higher fixed costs over diversified products----> Low per unit
costs