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Indian Economy




                    Notes            under a brand in India and as a molecule to Novamin. By 1989, Morphene was exporting
                                     almost 25% of its production. Everything was going very smoothly but in 1991, the economy
                                     was liberalized. Being a signatory of GATT, soon India needed to follow the International
                                     Patent norms under which the Product is patented and there was no scope for reverse
                                     engineering.
                                     Mr Mohan has to prepare his company for the future. He thought of two strategies:
                                     1.   To make the company attractive and sell it to some MNCs which are supposed to
                                          come in near future and may be interested in some strong local player to have a
                                          strong foothold in the country.
                                     2.   To invest in R&D and compete with MNCs.

                                     Mr Mohan was not comfortable with the first option and for him second option was not
                                     feasible for his small company with a turnover of ` 120 crore.
                                     He lived in this dilemma for the next three years and followed the same business model
                                     and by 1994, his turnover reached 160 crore. By 1994, things were changing very fast. His
                                     company being a Zero Debt company had enough cash reserves (20 crore) and being a
                                     Zero Debt Company and a good profitability ratio (15%), banks were ready to provide
                                     liberal loans.
                                     Mr Mohit Dalal, the Marketing Manager of the company looks after the Domestic and
                                     International Marketing of the Firm. In 1992, Mr Mohan had sent Mr Dalal to Kellogs to
                                     attend the one year Executive Management Programme. After coming from Kellog,
                                     Mr Dalal was continuously trying to foray into the international market.
                                     In April 1995, Mr Mohit Dalal gave a ring to Mr Mohan from USA. He congratulated
                                     Mr Mohan and said that it was time for celebration as there were two good news for
                                     Morphene, one is that it had fetched an order of supplying a bulk drug to a MNC worth
                                     ` 100 crore per annum for coming five years. That will not only double the turnover of the
                                     company but will also open the avenues for new orders. Mr Dalal further said that WTO
                                     agreement will be applicable from 1995 and by 2000, new Patent Law will be applicable in
                                     India.
                                     Mr Mohan was very happy with the order but couldn’t understand what is good about the
                                     new Patent Law, in fact he was worried for the same for last five years. Mr Mohan
                                     congratulated Mr Mohit and asked him to return to India.
                                     As Mr Dalal returned, Mr Mohan asked to meet him. Mr Mohan Choksy shared his doubt
                                     with Mr Mohit Dalal. Mr Mohit Dalal said that world is Globalizing and “it is not only we
                                     but more than 150 nations have signed the WTO Agreement. If our market is open for
                                     foreign companies, then foreign market is also open for us”. He further added that
                                     “Globalisation is an opportunity for Morphene and not a threat”. Mr Mohan Choksy was
                                     listening to Mr Dalal and asked with a silver line in his eyes that how it is an opportunity.
                                     Mr Dalal described that “instead of becoming competitor to MNCs we will become
                                     complimentary to MNCs”. In the scenario, he said:
                                     1.   “MNCs are coming to India and they require manufacturing base and the state of the
                                          art manufacturing capacity, we can supply bulk drugs to them.
                                     2.   We are already supplying to USA and if those companies come to India, they will
                                          come to them naturally.
                                     3.   If we collaborate with these MNCs, they will also transfer new technology,
                                          manufacturing processes and international practices to get the product of their desired
                                          quality. This will help us in getting more export orders.
                                                                                                         Contd...



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