As India Pharma Inc strives to enter new, previously unexplored markets and battles unprecedented challenges, ‘Think Global, Act Local’ approach might be one of the strategies to derive a competitive advantage
Glocalisation as a concept is nothing new, especially for Indians. Be it our food, clothing, language or culture, we have adopted global trends as well as practices and ‘Indianised’ them to suit our tastes and preferences.
Take the Indian Chinese cuisine for instance. Also known as ‘Hakka Chinese’ or ‘Desi Chinese’, it is an “adaptation of Chinese seasoning and cooking techniques to Indian tastes”. Today, it has become an integral part of the Indian culinary culture.
Let’s not forget the Indo-western dresses, a very popular fashion, both in India and abroad. As a very interesting amalgamation of Indian and Western design sensibilities, this fusion is considered one of the most versatile fashion trends and it continues to evolve.
Glocalisation strategies
- Encouraging localisation
- Giving a fillip to local economies and interests
- Use of IT and communication technology
- Mobilising local communities
But, now glocalisation has evolved into a noteworthy business strategy which underlines the significance of adopting a local approach while upholding brand values. It has emerged as a recognised approach with proven benefits in terms of business growth on a global playing field.
McDonald’s Chatpata Naan or Phirni McFlurry, KFC’s vegetarian thali and Chana Snacker, HLL’s strategy to launch shampoo sachets priced at a rupee, MTV India are some good examples of this strategy in the Indian context. These global brands have entered India and transformed themselves into household names while retaining their brand identity, key messages and central philosophy.
Glocalisation and India Pharma Inc
India Pharma Inc too has experimented/ adopted this strategy, as it expands its footprint and presence in global markets. It is all the more relevant for this industry as it navigates its path to progress through the regulatory maze of different geographies and countries.
Evolution of Glocalisation
The term “Glocalisation” can be traced to a word “dochakuka” in Japanese culture which means global localisation. It initially referred to Japanese practices of adapting farming techniques to local conditions. Since then it has evolved into an important business strategy. The concept was later popularised by a number of sociologists, in the 1990s, namely Roland Robertson, Keith Hampton, Barry Wellman and Zygmunt Bauman. They refer to people who are actively involved in both local and global activities of commerce.
Source: https://www.sibm.edu/assets/pdf/glocalisation.pdf
Experience across sectors have taught us that the effect of local forces cannot be ignored. A thorough knowledge of these forces and strategic application of it will help the company gain acceptance within its target customer base, build brand loyalty, effectively navigate through market conditions, gain a cost and competitive advantage as well as create meaningful collaborations for long term benefits.
Utkarsh Palnitkar, Partner, National Head – Infrastructure, Government & Healthcare, National Head – Life Sciences, KPMG, speaking in his individual capacity, clearly outlines the prerequisites for a glocal strategy and states, “A clearly defined product portfolio which addresses the therapeutic class in which the company operates is vital. Gaps in the bouquet of products which a company deals in could be augmented through in-licensing, alliances. Regulatory challenges are a given and one can’t wish them way. Success will lie in navigating these through nimble strategies rather than fighting them.”
Dr Fabrice Egros, President of Asia Pacific and Japan, Lupin also points out, “In an increasingly interconnected and competitive global environment, it is the ability of an organisation to think globally and act locally that sets them apart. This becomes all the more critical for companies in sectors like pharma and lifesciences because of the impact our products can have on a large segment of the population.”
Here are a few of the most significant advantages offered by a glocal strategy:
Leverage local market advantages: A thorough understanding of the local forces at work will help a pharma company to spot and appreciate the opportunities available in the market it seeks to serve and leverage them effectively. For instance, many pharma companies have been acquiring/creating manufacturing facilities overseas as it helps them to manufacture for the local markets easily, get cheaper labour and raw material as well as save on transportation and logistics costs, thereby reducing their overall production and consumption costs.
Prashant Tewari, MD, USV explains it very well. He says, “Almost all large companies from India have own front-ends in all major markets from North America, Latin America, Russia etc. If functions that involve local cultural barriers or knowledge such as sales & marketing, regulatory, legal are localised, the benefit is faster decision making, closer to where the market is.
Better customer engagement and thereby brand loyalty: A glocal strategy enables a company to engage the customer better and create products/ services which are better suited for that market. It also makes the company more agile, adaptable and responsive. Insights gained from operating in these markets can be used in turn to further facilitate progress. Faster acceptance and brand loyalty is another major advantage.
Effective resource management: Glocalisation also enables a pharma company to develop closer and long-term relationships with local suppliers and create a more efficient and better functioning supply-chain networks. For pharma companies, this could be a great competitive advantage. Moreover, these companies can also emerge as significant job creators. It can become a source of nurturing local talent. In turn, resident employees can be a very effective source for insights into the market.
Improved adherence to regulations: In times of increased regulatory scrutiny, glocalisation may turn out to be an ally. Knowing the market well and adapting to the local conditions could be a crucial step towards ensuring regulatory adherence. Moreover, a local workforce is a fount of information and can help ensure that regulations are better understood and followed to the letter to enable business success. An effective glocal strategy can also be key to navigating political and judicial structures which dictate the norms of privacy, patent concerns, and censorship.
Dr Ashok Kumar, President – R&D (Chemical), IPCA Laboratories highlights, “A company should weigh its strengths and weakness critically while planning glocal strategy. Regulatory challenges have cropped up during last few years because of the failure to keep-up the pace with rapidly evolving global quality metrics and transform according to revised standards. Having trained and qualified people at right place shall help the companies devise global strategies, whilst remaining rooted to home turf.”
Provide social value: As pharma companies enter new markets and devise glocal market access strategies they also contribute to meet underserved healthcare needs and increase access to medicines. At the same time, as they set up thriving businesses, glocalisation also helps the country grow and encourage development. These businesses also contribute to local economies and get an opportunity to emerge as a credible and trustworthy organisation. Thus, as a global brand entering distinct markets, the glocal advantage can be key to progress.
So, how has the life sciences sector leveraged this strategy to accelerate their growth? A few leading players in the pharma industry share their glocal strategies with ExpressPharma.
Lupin: Customising according to cultural norms
Dr Egros explains about Lupin’s glocal strategy and says, “As a transnational company with successful operations in more than 100 countries across the world, our glocalisation efforts have focused on two primary objectives: leveraging our capabilities as a global generics powerhouse and matching our products to the individual markets we cater to.”
Citing an example, he narrates, “Traditionally, Japan has been a challenging market for a lot of global and Indian pharma companies, however it has emerged as the third largest market for Lupin – a testimonial to our approach to glocalisation. An example of this is the sensitivity around the overall finish and size of the pharma tablets which is very specific to Japan – a factor often overlooked by other manufacturers. Another element very peculiar to Japan is the cultural norms that permeates both the professional and personal spheres in Japan, a hurdle we have overcome by implementing the lessons we have learnt through acquisitions such as Kyowa and partnerships with local Japanese pharma companies like Shionogi, Astellas, and others.”
IPCA Laboratories: Venturing into new growth areas
IPCA is looking at growth through product expansion and glocalisation has helped it to look at areas and markets which will drive accelerated growth. Explaining the rationale behind the move, Dr Kumar updates, “The strategy opted by large MNCs, mainly focusing on therapeutic areas where the development of new drugs takes less time helping them quickly replacing old ones with improved versions has proven to be a game-changer for them, but a nightmare for Indian generic companies because it may not have the availability of more blockbusters in the future to replicate and have good/ sustainable returns.”
He further elaborates, “Therefore, given that quite a good number of major multinational pharma players are also venturing into generic drugs arena to increase the size of their profit pie and the intensified competition at the home turf becoming yet fiercer; it becomes imperative to be glocal and think beyond physical boundaries. Only getting out of the comfort zone can now help companies withstand aggressive competition.”
“We keep revisiting our strategies according to changing global pharma business dynamics. Driven by inherent and acquired strengths we have been diversifying and venturing into high value businesses. Development of biosimilars and also of small molecules with better efficacy and broad combination therapy indications are few examples reflecting our glocal strategy, he informs.
ACG Worldwide: Going near your customers
ACG is planning to expand globally and penetrate into regulated markets like Europe and the US. It has facilities in Eastern Europe and South America. In fact, in a conversation with this writer at CpHI India, Karan Singh, MD, ACG Worldwide has informed that the company will be inaugurating its second facility in South America in about six months to locally manufacture capsules and films. The company expects these facilities overseas to help strengthen and consolidate the company’s footing and position in these markets.
Elaborating on their glocal strategy, Singh says, “What we are seeing is that many of our customers are buying companies overseas and very often they tell us that they need us to be there as well. However, often it is difficult to pick up existing facilities that manufacture capsules and films. So, often we have to set up greenfield projects. So, it is mix, we are looking at both, greenfield and brownfield projects, to be near our customers and provide them with value.”
He mentions harmonising as a major challenge in brownfield facilities and beginning everything from scratch in greenfield projects. However he feels that the company is also de-risking to some extent with these measures. Though ACG hasn’t faced any issues in trade so far due to international regulations, he feels that in case protectionist policies become an issue, import duties are proposed, trade becomes difficult and borders are closed, then ACG would already have a local presence in major pharma hubs of the globe.
Schott Kaisha: Leveraging Technology
Schott Kaisha has effectively used technology to bring in value to the pharma sector in India. Rishad Dadachanji, Director, SCHOTT KAISHA elaborates on their strategy and informs, “In developing countries such as India where price plays a major role, it is very essential that global and new technologies are made available at affordable prices. If packaging companies such as Schott Kaisha do not offer new and innovative ideas it would restrict Indian companies from being able to provide an equivalent product at affordable prices in the market. By making this available to the Indian pharma companies the major benefit we offer is a high quality product which is easily accessible to them at any time.”
“Our plants are set up based on a global standard and are equipped with the most updated technology that the industry has to offer. We have worked with our partners and developed systems with the capability to offer very high accuracy and consistency in its respective functions. This enables us to offer the Indian pharma companies high quality products at reasonable prices,” he further informs.
Glocalisation for India market
Thus, while Indian companies are revisiting their strategies for the overseas markets, experts feel that the MNCs in the life sciences sector looking to tap the Indian market also should create a strategy which is country-specific. Palnitkar advises, “The Indian market, though extremely price sensitive, has tremendous potential and hence a carefully thought through India-specific strategy could pay rich dividends. A one size fits all play will not work here.”
He also asserts, “I think a two-pronged strategy, will help pharma companies balance out the risk associated with focusing on one geography alone. Having said that, a very different approach to the market will have to be adopted. Replicating what works in other markets will not hold good for India.
Fundamentals of glocalisation as a business strategy
- Localisation – Requires the company getting into a country to know its culture, customs, regulations, and local medical practices
- Global operations – It requires a sound understanding of technological advancements and adequate global capabilities.
- A thorough understanding of the target customers and ways of making a product or service locally relevant
“There are several examples of well positioned products that have been able to make a difference. In the last few years, for example the manner in which some brands have been able to carve a footprint has been remarkable, Januvia for example,” he points out.
The companies too have realised this fact and are now tailoring their approaches to suit the Indian market. Takeda Pharma is one such example. Ashok Bhattacharya, Executive Director, Takeda Pharmaceuticals India explains that his company is very keen to leverage the opportunities in the Indian market. He further informs that the company aims to get into the Indian market with innovative therapies to help mitigate the healthcare challenges which are very relevant to the country and reach out to as many patients as possible. For instance; diabetes, GI, oncology, etc. are its areas of focus. This, in turn, will help the company bring in the highest differentiation in the Indian market.
Similarly, DuPont intends to widen the application and adoption of Tyvek, a durable, lightweight fabric that can be used for wide range of packaging uses, in the life sciences sector. In conversation with Express Pharma at CphI India, representatives of the company, Shyam Patnaik, South Asia leader, Tyvek and Suolong Ni, Regional Sales Leader, Tyvek informed that their major objective at the event was to understand the Indian pharma market and its requirements comprehensively so that they can use these insights serve the industry better. Companies are realising that the Indian market has certain peculiarities and they need to be taken into consideration to gain inroads in this market.
A glocal future?
Thus, glocalisation has the potential to be a solution to the struggle that international businesses have battled between global and local demands. If well implemented, good glocal strategies can help create more cohesive and healthy business environments, increase the quality of products and services and drive down prices, making drugs more accessible.