Biotechnology business models: An Indian perspective

Abstract

A typical business model consists of three components – value proposition, value-chain structure and revenue generation. These components are used to give a general description of a business. The biotechnology industry is not really characterised by specific business models and neither is there one single model for success. The sector is not only characterised by an enormous diversity, but is also driven by innovations, which makes the prediction of future development rather difficult. The enormous flexibility of biotechnology companies is a strength that has helped them survive in times of economic difficulties. In years of crisis, companies have managed to reorient themselves, change their business plans or even switch markets. Several Indian firms have focused their businesses on the development, manufacturing and marketing of biopharmaceuticals and providing services. The Indian companies appear well positioned to leverage their cost-effective manufacturing capabilities to corner some of the market share and compete on a global scale. This paper discusses the various business models and strategies adopted by the biotechnology companies that directed the growth of the biotechnology industry in the country based on the techno-economic dynamics and the key challenges faced by these firms.