Market leadership in India’s pharmaceutical industry: the case of Cipla Limited

This chapter analyses the case of Cipla as a market leader in India’s pharmaceutical industry, which itself is a leader in India’s manufacturing industry. Cipla meets all the three conditions of market leadership: market dominance, global reach and innovation. Cipla has had a significantly long history of development and has enjoyed success in serving both domestic and foreign markets better than many of its domestic rivals. It has been a trailblazer for pioneering low-cost, lifesaving drugs and, as a result, it is a highly respected company in India. The chapter seeks to explain the source of leadership in terms of firm-level and sector-level factors. Knowledge-intensive entrepreneurship is a key factor. The firm has a strong vision and focused corporate strategy. Cipla has also taken advantage of three sector-level factors, namely the patent regime, technology contributions from public research institutes (PRIs) and the higher-education sector. In a number of ways, the origins of Cipla’s leadership are similar to those discussed in the Tata Motors case: a key factor common to both is the knowledge-intensive entrepreneurship. Although the founding entrepreneurs wield overall control, the management of both companies is in professional hands. In both cases, the contribution of both sectoral and country-level factors have been important.