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