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Investment banker wants to enter a new industry with an investment of $1mn.

3 industries in order
of preference

The Indian context
1. Outlook as a rapid growth market has weakened as external pressures compounded by
weaknesses
2. A supply side revolution is being aimed for by the new government and a lot of reforms are
in the pipeline but there are high growth consistently performing industries
If we were to plot the compounded annual growth rates vs Industry size it becomes amply clear that
a few sectors stand out:
1. Pharmaceutical
2. IT and ITeS
3. Infrastructure

A quick analysis of current landscape is as follows:
Pharma
Industry size
1. Currently growing at a CAGR > 12%
2. Expected to reach USD 55 bn by 2020
Key growth drivers
1. Growth in income levels and associated increase in spending
2. Growth in medical infrastructure. (Doctors, hospitals etc.) is seeing a phenomenal rise
3. Increase in no. of people covered by insurance expected to rise two fold
4. Healthcare spending as a % of gdp by government is on a steady rise
5. Prevalence rate of diseases is on the rise
6. Accessibility and acceptability is expected to rise

Power of suppliers
1. Volume benefits
2. Standard inputs and readily available
3. Many suppliers
4. Raw material costs contribute ~50%

Barriers to entry
1. Low barriers to entry
2. Govt policies supportive
3. Economies of scale exist
Industry competition
1. Highly competitive. Top 10 firms account for 30% of marketshare
2. High growth rate prospects
Substitutes
1. Substitutes available in case of generic drugs

Power of Buyers
1. Limited bargaining power
2. Brand identity in the hands of MRs and doctors
3. Less price sensitivity

Go to market strategy
A go-to-market strategy can be identified based on one of the possible scenarios:
1. Key growth drivers (as mentioned previously) change little.
a. Customer: Rural and Urban. Mostly generic drug customers
b. Product portfolio: decent mix of generic and novelty drugs. Limited spend on R&D.
c. Pricing: mass market pricing
d. Promotion: Mix of advertising and through doctors
e. Placement: Mass market
f. Business model: contract manufacturing with above integrations
2. Novelty products become king
a. Customer: Mostly Urban. Focus on Novelty products. Chronic disease emphasis
b. Product portfolio: More inclined towards novelty drugs. R&D through
collaborations.
c. Pricing: premium pricing
d. Promotion: Through doctors and contracts with hospital chains
e. Placement: Niche market
f. Business model: Licensing of products/own manufacturing/own distribution netwrok
3. Government introduces populist measures on pricing
a. Customer: Rural and Urban
b. Product portfolio: More balanced portfolio. Limited research.
c. Pricing: determined by govt controls
d. Promotion: Extensive promotion through doctors and contracts with hospital chains
e. Placement: mass market
f. Business model: Complete vertical integration

The final Go-To-Market strategy would be to
1. Identify contingent elements for the different scenarios
2. Plan accordingly
3. Implement strategy
4. Prioritize investments
5. Continually evaluate performance
6. Tweak strategy with changing landscape/scenarios


Leaving (1242) / entering (1124) campus:
1. Professors (Strength: 100) (L = 92 E = 64)
a. Stay in Kolkata and nearby (L: 10) (E: 2)
b. Visit outside shops (L: 20) (E: 20)
c. Attend conference/meetings (L: 20) (E: 0)
d. Go elsewhere in Kolkata (L: 42) (E:42)
i. With family (10*4)
ii. Without family (2)
2. Students (Strength: 1000) (L = 830 E = 770)
a. Stay in Kolkata and nearby (L: 50)
b. Visit outside shops (L = E = 720)
i. Smokers (75*1 + 30*2)
ii. Alcohol drinkers (100)
iii. Chai/coffee enthusiasts (75)
iv. Miscellaneous reasons (50)
c. Attend conference/meetings (L: 10)
d. Go elsewhere in Kolkata (L = E = 50)
3. Staff and others (Strength: 300) (L = 320 E = 290)
a. Hostel (Strength: 100) (L = 120 E = 110)
i. Daily commuters (L = E = 90)
ii. Weekly commuters(L: 10)
iii. Visit outside shops (L = E = 20)
b. Academic (Strength: 100) (L = 100 E = 95)
i. Daily commuters (L = E = 90)
ii. Weekly commuters (L = 5)
iii. Visit outside shops (L = E = 5)
c. Other support staff (Strength: 50) (L = 50 E = 45)
i. Daily commuters (L = E = 40)
ii. Weekly commuters (L = 5)
iii. Visit outside shops (L = E = 5)
d. Construction workers (Strength: 50) (L = 50 E = 40)
i. Daily commuters (L = E = 30)
ii. Weekly commuters (L = 10)
iii. Visit outside shops (L = E = 10)

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