Case 3:

Glenmark is an Indian-based multinational pharmaceutical company with approximately $30

billion in sales annually. In the 2021 Annual Report, the Indian company indicated $5.94 billion

dedicated to research and development (R&D). Moreover, the pharmaceutical company spent

$10.19 billion in marketing and sales in 2021. R&D and marketing expenses represent a large

portion of their total fixed costs with more than $16 billion! With this amount injected, Glenmark

creates a barrier to entry for other firms that are considering whether to enter the pharmaceutical

market or not.

It is only by going global through a large distribution network will Glenmark be able to benefit

from economies of scale. By going global, Glenmark will target more customers and spread their

fixed costs better. This also explains why multinational company has such high marketing costs.

1. Explain whether the capital expenditures by the company is justified and be able to increase

market share in future?

2. Are there any suggestions you would like to give to make its fixed costs better?

(Minimum 500 Words.)

Please Be Carful 500 Words