Zandu pharmaceuticals, based at Jamnagar, Gujarat, India, operated by two families, the Parikhs and the Vaidyas. They established the company in 1910, and through facilitating each other they run the business for about a century. The Parikhs, primarily part of a trading community, brought their business acumen to the firm. On the other hand, the Vaidyas capitalize their technical expertise to the business, when came from a lineage of Ayurveda practitioners.
To sustain the business for a far longer term, each of the families had to pass their knowledge effectively to their descendants. The Parikhs’ later generation had succeeded to gather the technical knowledge, owned only by the Vaidyas and formed the deep roots in the firm’s overall operations. On the contrary, the Vaidyas had not paid concentration in creating the competency in their next generation. Ultimately, the Parikhs took the executive authority from the Vaidyas as they seemed marginalized.
After such ignorance, the Vaidyas sold their holdings in Zandu to Indian based Emami group, a Kolkata based, beauty and healthcare company. The case describes this takeover bid when Emami group intended to take over Zandu Pharmaceutical in 2008. The Parikhs, then had to choose a direction that whether to sell their stake to Emami or to fight the takeover battle.
The case demonstrates the course of actions pursued by each of the parties. It deals and elaborates multiple managerial issues, including acquisition strategy, communication, leadership and the emotional challenges encountered by both of the families.
It helps students to enhance their understanding the kind of communication, leadership, strategic and negotiation skill are required in complex acquisition scenarios, such as in family owned businesses.
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