Readings:

Lane, Salk, Lyles “Absorptive Capacity, learning, and Performance in International Joint Ventures”

Stach “Business alliances at Eli Lilly”

Assignment:

Eli Lilly must decide if it wants to continue with its IJV with Ranbaxy. As discussed in the case Ranbaxy is considering exiting the IJV, so several options are presented Eli Lily. Option 1was to maintain the status quo and continue the IJV as is. Option 2 was to buy out Ranbaxy’s stake totally (Consider how much you would pay). Option 3 was to partially buy out Ranbaxy’s stake (consider what percentage and how much you would pay). Option 4 is to liquidate the IJV and exit India.

Prepare a five (5) minute presentation as if you are a consultant discussing with Eli Lily top management on the managerial action question of “What option should Eli Lilly take concerning the IJV in India and why?”

Use the following questions to assist you in determining the option for the IJV.

Questions:

1. What industry are Eli Lilly and Ranbaxy in?

2. How global is the industry? I.e. where on the continuum is it and why?

3. What does each partner want from the IJV?

4. Consider the evolution of the IJV using the three general managers’ tenure. What were the challenges that each confronted?

5. How well do you think the IJV performed? What did each partner learn?

6. What action would you recommend for the future of the IJV?