ELI LILLY & COMPANY:GLOBALIZATION

Introduction:
Eli Lilly and Company is a global, high technology company founded by Colonel Eli
Lilly in 1876 in Indianapolis, in the midwestern section of United States. A 38-year-
old pharmaceutical chemist, Colonel Lilly was frustrated by the poorly prepared,
often-ineffective medicines of his day. Consequently, he made these commitments to
himself and to society
 To found a company that manufactured pharmaceutical products of the highest
possible quality.  
 Lilly pharmaceutical will be based on the best science of the day
 To develop medicines that would be dispensed at the suggestion of physicians
rather than by eloquent sideshow hucksters
The company is a research based Pharmaceutical Corporation dedicated to creating
and delivering innovative pharmaceutical based health care solutions that enable
people to live longer, healthier and more active lives. Through its internal scientific
programs and dozens of research based partnerships worldwide, it is targeting
solutions for many of the world’s most urgent, unmet medical needs. Its deep research
and clinical expertise has prepared it to take advantage of this golden age of discovery
in the life sciences on behalf of patients who are dependent on medical
innovation.Lilly is focusing on the discovery and development of the most effective
pharmaceutical based health care solutions for its diverse customers throughout the
world. It is dramaticallyaccelerating its drug discovery and development processes
and, thus, the speed at which its new products achieve regulatory approval and reach
patients. With its pharmaceutical business central to its efforts to provide customers
with the best clinical and economic outcomes, it seeks constant innovation through
the creative combination of scientific discovery and the application of information
technology. This continual search for innovation underpins its efforts not only in the
laboratory but also throughout the entire Lilly organization. The employees of the
organization stay focused on the following priorities:
 Enhance scientific innovation
 Optimize the launch of its newer products
 Grow operating income by increasing sales and restraining costs
The goal of the company is to create an innovation engine that is open to the world. It
has identified the best sources of learning, tries to improve everything it does and
seeks innovation wherever it is available. It is a research and development
organization capable of consistently and rapidly discovering and developing truly
innovative medicines, its current rich pipeline and growing portfolio show some of
the progress it is making.  The different divisions of the company are Lilly Research
Laboratories, Elanco Animal Health and Health Systems Division.
Lilly’s Mission and Values:

Mission:
 To provide innovative pharmaceutical-based solutions for
the unmet medical needs of the customers around the
globe
 To expect nothing less than restoring Lilly to the top level
of the pharmaceutical industry in growing shareholder
value

Values :

 Respect for people that includes its concern for the

interests of all the people worldwide who touch or are
touched by Lilly, i.e., customers, employees, shareholders,
partners and communities
 Integrity that embraces the very highest standards of
honesty, ethical behavior and exemplary moral character
 Excellence that is reflected in its continuous search for
new ways to improve the performance of its business in
order to become the best at what it delivers

Human Resources:
 At Lilly, people are the source of all its abilities, and all its successes. Its failure
depends on its global community of employees who’s varied perspectives; experience
and training fuel the creativity and energy to pioneer pharmaceutical innovation. Lilly
employees more than 29000 worldwide. The company respects its employees and all
people throughout the world who are touched by the company. Its actions and
behaviors demonstrate and conform its respect for each other and each other’s
contributions. Each employee is personally responsible and accountable for ensuring
that his/her actions and behaviors reflect the diversity policy, i.e., to develop and
utilize the diverse talents and energies of all the employees worldwide. The people are
encouraged to become involved in their communities, lending their voluntary support
to programs that enrich the quality of life and opportunities for all citizens.
Sales and Marketing:
Eli Lilly and Company is a global pharmaceutical corporation with its market
presence in 161 countries. It has acquired information resources and capabilities
beyond most of its competitors. The company has undertaken a broad-scale effort to
redefine its approach to marketing and sales in order to ensure its lead in the
marketplace of the future. A subset of this approach is the ongoing effort to globalize.
If the company is to achieve growth on a growing base, it must tap the huge potential
of markets around the world. The biggest challenge is to build critical mass in those
markets where its innovation would be most welcome.

Research and Development:

Eli Lilly and Company has been at the forefront of many of the most significant
breakthroughs in modern medicine. Research and development facilities are located in
Australia, Belgium, Canada, England, Germany, Japan, Singapore, Spain, and United
States. The R&D of the company has an objective to reduce key steps that have
historically taken five years or more down to 500 days. The company’s philosophy is
to pursue innovative science and technology from external as well as internal sources.
Therefore, an important and expanding aspect of Lilly’s research and development
strategy is in the area of alliances and partnerships. Innovation has been the driving
force that contributed to the upward climb of the company. The company is
strengthening its ability to identify high potential drug candidates by improving its
research and development processes, investing in new research technologies and
expanding its research team. Lilly Research Laboratories has completed a major effort
to restructure its discovery and development functions so a to promote and enhance
the sense of innovation.
Eli Lilly and Company is dedicated to the discovery and development of products of
the highest quality that improves the health and well being of people around the
world.
 It has a global presence so far as sales, manufacturing and research is
concerned.
 It ranks among the top 10 pharmaceutical companies in the world with its
products available in over 106 countries.
 It is committed to the research and development of innovative products.
 The ability to continually learn helps it to evolve and adapt to an ever-
changing environment.
 It is emerging as an industry leader in forging productive alliances.
Process of globalization:
 The focus of the company’s business is to enlarge its competitive
capabilities and truly globalize its operations. The company is doing
business in nearly 160 countries around the world. The true globalization
involves building a perspective that transcends the limitations of
nationality. The process of globalization is initiated with an idea not only
to bring Lilly to the world but also to bring the world into the Lilly,
particularly at its senior management ranks. It has 10 out of 19 members of
operations committee who do not belong to U.S. It has strengthened its
roaster in other ways as well by recruiting a number of world class leaders
to complement those already on board in key management and technical
positions throughout the organization.
 The products of Elli Lilly and company address the unmet needs; they also
often reduce the cost of disease, thereby providing significant economic
benefits for patients, providers, and payers. The company focuses its
collective energies on validating the potential of its products in the clinic
and optimizing its benefit in the market place. The expanding breadth of
the scientific reach combined with formidable marketing capabilities is
responsible for citing Lilly as a leader both in accelerating discovery and
speeding innovative new products to patients.
 In keeping with its commitment to provide customers with effective results
and lower costs, Lilly encouragesa process of transition from traditionally
component-based health care to a comprehensive integrated approach to
health care delivery. It believes that the best approach to treatment is to
consider the whole patient and to use combination of interventions and
therapies to produce optimal clinical and economic results.
 The differentiation is created by means of perceived value through
services. With newly available information technology, it seek to use its
expertise in disease management and integrated care to link all the
participants in the healthcare chain, i.e., physicians, pharmacists, payers,
providers and patients. The customer value is of greater importance as it
forms the basis for the continual search for innovation through the creative
combination of scientific discovery and the application of information
technology. As Lilly is a research based pharmaceutical company, it keeps
on creating and delivering innovative products at regular intervals of time.
The time factor and consistency is responsible for generating competitive
advantage as the organization is quite ahead of the competitors so far as
introduction of new products is concerned.
 The coordinated actions of all the functions in the company lead to the
generation of competitive advantage. In every part of the organization, in
every place where it operates, nothing has been so impressing as the
reawakening of the spirit of its people. The employees have the confidence
that they can control their own destination and the destiny of the shared
enterprise.
 Processes leading towards core competence
development:
Lilly’s research and development efforts target health solutions that address urgent,
unmet medical needs, replace more expensive and invasive medical treatment, and
bring to market several important new products quite ahead of the competitors. The
organization’s core competence in R&D and marketing plays an important role in
introducing new products, acquiring high potential drug candidates and help the
customers to get the maximum benefits from its products. The various organizational
processes that help in developing organizational core competence are:
 Timely Introduction of New Products and Other Technologies (TINPOT)
 Creative Employee Suggestion Schemes (CESS)
 Training and development
 Cross functional exposure

Core competence:
Lilly is a worldwide leader in pharmaceutical based integrated health care and
recognizes the importance of understanding a wide array of domestic and global
unmet medical needs of the people. It is engaged in more than 100 R&D agreements
and has tapped the huge potential of markets around the world. The core competence
of the organization enables it to deliver a set ofcustomer benefits at lower cost thanits
competitors.  

Core Competence for Eli Lilly &

Company
Tests Conformance to tests of core competence
Customer value Reduce the cost of disease by providing effective results.
Competitor Adopts patient focused and process oriented approach.
differentiation
Extendibility Enables the organization to pour its growing stream into global markets and create new
competitive space.
 
The concept of core competence has been introduced in the organization. The
management believes that the process involving everything from new gene
discoveries to new delivery technologies is an evolving core competence for Lilly and
it needs to be enhanced for going forward. The R&D and marketing competencies are
embedded in the people and assets of the organization. The organization is committed
to developing and utilizing the diverse talents and energies of all its employees
worldwide. People are the source of all the abilities that the organization exhibits in
its superior performance. Lilly is a globalized corporation and its success depends on
the employees who provide fuel and energy for thecreativity that is important for
pharmaceutical innovation.

According to the annual report of the company we can see that sales of the company
increased by 46% in 5 years.in 1988 cost of sales of the company also incresad by
24.05% in compairing 1985 where as R&D increased by 61.5%.marketing expenses
increased by 57.2%.net income of the income increased by 55.30%.current asset of
the company increased by 32%.the ideal curren ratio is 2.the current ratio of the
company was fixed in last 4 years that is 1.9.so , we can say that the company had
enough money to pay its liability.the fixed asset of the company increased by 42%
where as long term debt increased by 231%.depreciation increased by 77%.the
company equity capital increased by 42%.the debt-equity ratio in1988 and 1987 was
12%,and in 1986 was 14.4%.A high debt/equity ratio generally means that a company
has been aggressive in financing its growth with debt. This can result in volatile
earnings as a result of the additional interest expense.return on equty share holder
increased in 1988 in comparing 1987 and 1986.return on asset also increased over the
years.the company had 8% compound growty over the 5 year.and the company had
70% of the corporation sales which was next by Merck and Glaxo.the company’s
R&D expenses also lower than Merck and Glaxo.the company had sale 70% of total
sales in home country.

Conclusion:
Any organization that wishes to hold its present customers and expand its customer
base has to innovate more effectively than its competitor. This needs the creation of
an innovative climate, i.e., each department and function of the organization must be
concerned with innovation of an incremental kind. The company has to set aside
human and financial resources also to produce radical innovations for the future. If the
organization does not have the will and capability to innovate, inevitably ends up with
obsolete products and services which customers are never interested to buy. The
continuous improvement is a philosophy that states that production, engineering, and
marketing excellence require ongoing attention and learning. In order to stay
competitive in the changing environment, the organizations must design their
strategies that exploit to maximize the effect of their core competencies. The top
management needs think carefully which of the capabilities really create unique value
and which activities can more effectively be bought from outside. The core
competencies are strategically important as they cannot be easily imitated or acquired
by the competitors. In order to stay competitive in future markets, there has to be a
competitive innovation rather than competitive imitation.