Term paper of Square Pharma
Transcript of Term paper of Square Pharma
Term Paper on Square Pharmaceuticals
Ltd. Bangladesh
Submitted toProf Dr. M. Mahmodul Hasan
Faculty of MBA Program (AIUB)
Submitted byNishi, Sonia Akhter 13-97251-3
Submission Date19-04-2015
April 19, 2014.
Prof. Dr. M. Mahmodul Hasan
Faculty of MBA program.
American International University- Bangladesh.
Subject: Submission of our report on Square Pharmaceutical Ltd.
Bangladesh.
Dear Sir,
We take the pleasure to submit our report on the strategic
analysis of Square Pharmaceutical Ltd. Bangladesh. The report
gave us the opportunity to understand how to conduct a strategic
analysis in an effective way.
Square Pharmaceutical Ltd. Bangladesh is the leading
pharmaceutical company in Bangladesh which helps to meet the
customer demand as well as contributing in the GDP growth of the
country. Now a days it is very much popular brand in the marker
because of their product quality. They are also conscious
regarding the environment and their improving of product quality.
We are truly grateful to you for giving us this pleasant
opportunity to work on this report. The entire group contribution
has led the successful completion of this report. Despite our all
possible attempts, certain deficiencies may reside and we
sincerely regret this. We are grateful to you for your continuous
guidance in preparing the group project.
Yours sincerely,
BOOM-Al- Habibi.
AcknowledgementWe are heartily thankful to our advisor Prof. Dr. Md. Mahmodul
Hasan whose encouragement, supervision and support from the
preliminary to the concluding level enabled us to write this term
paper. It was a wonderful experience while working on this topic.
A great number of people have made significant contributions in
preparing this paper. We are heavily grateful to all of them. We
are expressing our immense gratitude to all of them who have
extended enormous support, guidance and speared their valuable
time in preparing this paper.
We also extend our heartfelt thanks to our family and well
wishers.
Definition of Strategy
Definition of Strategy: Strategy is a method or plan by which long term objectives will
be achieved. Long term objectives are the specific result that an
organization seeks to achieve in pursuing its basic mission.
Business strategies may involve geographic expansion,
diversification, acquisition, product development, market
penetration, retrenchment, divestiture, liquidation and joint
ventures.
Strategies are potential actions that require top management
decision and large amount of farm’s resources. Additionally
strategies affect an organization’s long term prosperity,
typically for at least five years, and thus are future oriented.
Strategies have multifunctional and multidivisional consequences
and required consideration of both the external and internal
factors facing the firm.
Most Strategic Management Model
There are several Strategic Models are available and used in
different organizations but following are the most used strategic
models:
1. PEST analysis
2. STEER Analysis
3. Five Forces Model
4. Strategic Group Map
5. SWOT analysis
6. Blue Ocean Strategies
7. Open innovation
8. McKinsey seven S model
Company Detailed Profile including mission &vision and Organogram
Company Detail Profile
Square pharmaceutical is now the most leading company in
Bangladesh since 1985 and is now on its way to becoming a high
performance global player. Today it has achieved a state of mind
among consumers. This company has founded in 1958 and since then
with hard work and dedication among employees and top management,
it has reached the position where every pharmaceutical company
wants to reach. Square went public in 1991 and is currently
listed on the Dhaka Stock Exchange and Chittagong Stock Exchange.
Square Pharmaceuticals Ltd., the flagship company, is holding the
strong leadership position in the pharmaceutical industry of
Bangladesh since 1985 and it has been continuously in the 1st
position among all national and multinational companies since
1985. Square Pharmaceuticals Ltd. is now on its way to becoming a
high performance global player.
Today Square has one of the largest sales force and distribution
networks of its own. This large distribution network operated 18
different locations across the country.
Square is no longer limited in domestic arena. From 1987, it
entered to global marketplace meaning they started to export
their antibiotics and other pharmaceutical products.
Based on the latest annual report some key highlights of Square
Pharmaceutical Ltd are-
Turnover (Gross) BDT 24,193 million, growth 16.64%
Turnover (Net) BDT 20,911million, growth 16.43%
Export BDT 846 million, growth 5.92%
Contribution to National Exchequer BDT 5,113 million, growth
17.63%
Gross profit BDT 9,182 million, growth 17.34%
Net profit after tax BDT 4,031 million, growth 17.90%
EPS BDT 8.36, growth 17.75%
Dividend payout (cash) BDT 1,445 million, growth 56.00%
Net asset value BDT 22,227 million, growth 16.92%
Board of directors:Mr. Samuel S Chowdhury (Chairman)
Mrs. Ratna Patra (vice chairman)
Mr. Tapan Chowdhury (Managing Director)
Dr. Kazi Harunar Rashid (Director)
Mr. Anjan Chowdhury (Director)
Mr. Kazi Iqbal Harun (Director)
Mr. M. Sekander Ali (Independent Director)
Mrs. Nihad Kabir (Independent Director)
Corporate Achievements:
Year of Establishment (Initially as a
Partnership)
:1958
Incorporated as a Private Limited
Company
:1964
Technical Collaboration Agreement with
Janssen Pharmaceuticals of Belgium
(A subsidiary of Johnson & Johnson
:1975
International Ltd.) Technical Collaboration Agreement with
F.Hoffman-La Roche & Co. Ltd.
:1984
Converted into Public Limited Company :1991 Initially Public Offering (IPO) :1994 Stock Exchange Listing (Dhaka &
Chittagong)
:1995
Agreement with M/s. Bovis Tanvec Ltd. of
UK for implementation of Dhaka Plant
:1996
Awarded ISO-9001 Certificate :1998 Awarded UK-MHRA & TGA Certificate as
well as “AA+” rating in the long term
and “ST-1” rating in the short term by
CRISL
:2007, 2012 and 2013
Business Lines :Manufacturing and
Marketing of
Pharmaceutical
Finished Products,
Basic Chemicals,
AgroVet Products and
Pesticide Products,
small volume
parental Opthalmic
products and insulin
products. Authorized Capital :TK 10,000 Million
Paid-up Capital :Tk. 4819.99 Million
Vision: We view business as a means to the material and social well being
of the investors, employees and society as a large, leading to
accretion of wealth through financial and moral gains as a part
of process of the human civilization.
Mission: Our mission is to produce and provide quality & innovative
healthcare relief for people, maintain stringently ethical
standard in business operation also ensuring benefit to the
shareholders, stakeholders and society at a large.
Objectives:Our objectives is to conduct transparent business operation based
on market mechanism within the legal and social frame work with
aims to attain the mission reflected by our vision.
Corporate Focus:Our vision, our mission and our objectives are to emphasize on
the quality of product, process and services leading to growth of
the company imbibed with good government practices.
Logo of Square pharma
Organization Chart:
Square Pharma has an organogram with modern features ensuring
clear lines of delegation of authority and reporting for
accountability for effective decision making.
PESTEL Analysis of Square PharmaceuticalV
PEST Analysis: PEST analysis stands for "Political, Economic,
Social, and Technological analysis" and describes a framework of
macro-environmental factors used in the environmental scanning
component of strategic management.
Political1.Recent political turmoil is affecting operation and distribution of all industries including pharmaceutical industry.
2. With the change of government power, export- import policies changes.
3. More than 27% tax is charged on pharmaceutical products.
4. For pharmaceutical industry, government do not allocate properbudget through fiscal policy.
Economical1.Currency fluctuation has significant impact on pharmaceutical industry.
2. Cheap labor cost lead to a increase in profit margin for this industry.
3. Rate of inflation in Bangladesh is not that much of high.
4. Pharmaceutical industry play a very vital role in Bangladesh’s GDPgrowth.
Social1.Population in Bangladesh is continuously increasing which boost this industry.
2. In urban area, people are not conscious and sufficient enough to use pharmaceutical products.
3. Culture has huge impact on pharmaceutical industry.
4. Meditation is now becoming very popular. It affects on Pharmaceutical product’s sale.
Technological1.Square is trying to upgrade and adopt new technology in production,quality control, distribution and administration of its products.
2. Pharmaceutical is a high-tech industry.
3. During the year 2013-14, Square has invested an amount of TK 108,086,342 in improving its laboratory.
Environmental1.According to UN, business should support a precautionary
Legal1.According to UN, business should eliminate discrimination in terms
approach to environmental challenges.
2. According to UN, business should undertake initiatives to promote greater environmental responsibility.
3. According to UN, business should encourage development and diffusion of environmental friendly technologies.
of employment and occupation.
2. According to UN, child labor must be stopped.
3. In Bangladesh, legal issues are not followed strictly.
4. They follow Companies Act 1994.
SWOT Analysis of Square Pharmaceutical Ltd
Strengths1.In 2013, Square’s growth rate is 16.43% against marketgrowth rate of 8.12%.
2. Square has highly efficient sales force and large own distribution channel.
3. Square has good brand image to its consumers.
4. For last 29 years, Square has maintained its number oneposition in market.
5. Square maintains high quality standards for its products.
6. Both their current and non- current liability is decreasing and shareholder’s
Weaknesses1.Square has made delay in introducing some injections thatIncepta has introduced earlier and now those are popular.
2. Square do not spend adequate money for R&D sector compared tothe nature of industry.
3. Selling & distribution costs are increasing.
4. Compared to the MNCs, Square has lack of resources.
5. They import their plants and raw materials from abroad, whichis costly.
equity is increasing.Opportunities
1.Square has the opportunity to export its products to giant India and USA market.
2. Large population in Bangladesh creates an opportunity to Square to serve more in domestic market.
3. People now have more affordability as their incomeis increasing.
4. Square should emphasize oninnovation more and more.
5. Although Square has strongdistribution channel, this need to be improved more.
Threats1. Recent political turmoil is affecting operation and distribution of all industries including pharmaceutical industry.
2. With the change of governmentpower, export- import policies changes.
3. More than 27% tax is charged on pharmaceutical products.
4. Rapid currency fluctuation has significant impact on pharmaceutical industry.
5. There is a huge competition from MNCs.
6. Recent good performance of Incepta and Beximco pharmaceutical is posing a threat to Square Pharmaceutical.
Porter’s Five Forces
For industry analysis Porter’s Five forces play a vital role.
Because through this Five forces analysis organization can
understand the competitiveness as well as the attractiveness of
the industry. Five forces analysis looks at five key areas namely
the threat of new entrants, the power of buyers, the power of
suppliers, the threat of substitutes and competitive rivalry.
v
SWAN Analysis
Power of Suppliers1. Numerous suppliers-switching
cost is low2. Some inputs are available
locally3. Suppliers can go for forward
Power of Buyers1. End consumers do not have
bargaining power.2. Brand identity exists but is
in the hands of influencer (Doctors)
3. Price Sensitivity is less
Barriers to entry1. Very low barriers to
entry2. Government Policies
supportive for entry 3. price regulation
Threats of Substitutes1. No substitutes for the
medicines2. Biotechnology is a treat
to synthetic pharma product
IndustryCompetition
H
i
g
Degree of Rivalry1. Industry growth is high.2. Number of Intermediate is
low.
h
3. Bra
Strengths:
1.In 2013, Square’s growth rate is 16.43% against market growth
rate of 8.12%.
2. Square has highly efficient sales force and large own
distribution channel.
3. Square has good brand image to its consumers.
4. For last 29 years, Square has maintained its number one
position in market.
5. Square maintains high quality standards for its products.
6. Both their current and non- current liability is decreasing
and shareholder’s equity is increasing.
Weaknesses:
1.Square has made delay in introducing some injections that
Incepta has introduced earlier and now those are popular.
2. Square do not spend adequate money for R&D sector compared to
the nature of industry.
3. Selling & distribution costs are increasing.
4. Compared to the MNCs, Square has lack of resources.
Actions:
1.Square should try to control over its non manufacturing costs
specially selling and distribution costs.
2. With the amount of retained earnings, Square should invest on
R & D sectors.
Next Step:
Square should look forward to innovation.
TWOS Matrix
Internal CPM Score
Strengths:1.In 2013, Square’s growth rate is 16.43% against marketgrowth rate of 8.12%.2. Square has highly efficient sales force and large own distribution channel. 3. Square has good brand image to its consumers.4. For last 29 years, Square has maintained its number oneposition in market.5. Square maintains high quality standards for its products.6. Both their current and non- current liability is decreasing and shareholder’s equity is increasing.
Weaknesses:1.Square has made delay in introducing some injectionsthat Incepta has introducedearlier and now those are popular.2. Square do not spend adequate money for R&D sector compared to the nature of industry.3. Selling & distribution costs are increasing.4. Compared to the MNCs, Square has lack of resources.
3.55
Opportunities1.Square has the opportunity to export its products to giant India and USA market.2. Large population in Bangladesh creates an opportunity to Square to serve more in domestic market.3. People now have more affordability as their incomeis increasing.4. Square should emphasize oninnovation more and more.5. Although Square has strongdistribution channel, this need to be improved more.
Threats1. .Recent political turmoil is affecting operation and distribution of all industries includingpharmaceutical industry.2. With the change of government power, export- import policies changes.3. More than 27% tax is charged on pharmaceutical products.4. Rapid currency fluctuation has significantimpact on pharmaceutical industry.5. There is a huge competition from MNCs.6. Recent good performance of Incepta and Beximco pharmaceutical is posing a threat to Square Pharmaceutical.
2.95
External EFE Score
Value Chain Analysis
Value Chain of a Pharmacetucal Company is a bit different than other company. There Research is much more important. Researchersresearch on the disease and then formulate the medicine. Later onthey go for the manufacturing and Marketing and the product line extension of that medicine.
There companies had to invest more in the research division. Because, only through research they can bring the new product as well as the solution of a diseases. All the activities of the research come from the diseases. Researchers find out how to prevent the diseases and there they find out what to produce as well as what will be the ingredients of the production and later on they go for the marketing and other works, although the pharmaceutical companies spend less money for marketing as it is prohibited to go through media like TV, billboard, news paper etc.
ViSA MODELVi Vision Squar’s Vision: we view business as a means to
the material and social well being of theinvestors, employees and society as a large,leading to accretion of wealth through financialand moral gains as a part of process of the humancivilization
S Strategy Maintain the top quality health care
products at the least cost reaching the lowest rungs of the economic class of peoplein the country.
Maintain the environment friendly business operation.
Innovation of new products.
Square consider their employees as the back-bone of the management and that’s why they provide best compensation to all the employees.
The Board of Directors, hold periodic meetings, at least once a quarter and provide appropriate decisions/directions andcheck the improvement and take necessary action.
Work on the brand image.
Last few years, they are on the leading position in the market and they are trying to maintain it.
The Board of Directors take special care in designing and articulating productivity and compensation plans of employees and workers and rewarding them appropriately on the basis of quality and quantity of performanceas an incentive
A Action Plan
Set of actions which required implementing
strategies to achieve vision :
More focus on Research and Development.
Ensuring and delivering of product quality.
SMARTER MODEL
Specific Targets and goals should be specific. Square Pharma set their target and point out the specific agenda which needed to be clearly communicated with the employees to achieve their mission and vision.
Measurable Goals and targets have to be logical and measurable,so that it can be well communicate to employees. Every year Square Pharma measure how far they have achieved their goals and targets.
Achievable Mission, vision, target or goals all of them set by
management has to be achievable and to achieve company’s vision strategies are set accordingly. Square has taken several strategies as guidance to achieve this long term vision.
Realistic Mission or Vision must have to be realistic, not ambiguous. Square has set their vision, which is realistic and achievable “We view business as a means to the material and social well being of the investors, employees and society as a large, leadingto accretion of wealth through financial and moral gains as a part of process of the human civilization.”
Time There is always a specific time period to achieve Mission, vision or any strategy. Square also set anystrategy to support any project wise goal or objective in a time frame
Encompassing In respect to identify so far achievements evaluation of any strategies is very essential. Square pharma evaluate their employee’s performancesas well as the strategy set by management to find out whether there is anything going wrong or not.
Reviewed Square publish their information quarterly, half yearly and yearly. That means they reviewed their performance as well as the strategy after a specificperiod of time, which is necessary to find out theirprogress and obstacle.
The BCG chart
BCG basically deals with two variables- 1. Relative market share
and 2.Industry growth. In our term paper we showed Square is in
the Star position. According to a data of 2013 stock market,
Square has captured the highest market share in pharmaceutical
industry which is worth of TK 1,378 crore. It signifies the
dominant position of Square’s in stock market. Besides in 2013,
the national market growth of pharmaceutical industry is 8.12%
whereas Square’s growth rate is 16.43%. It indicates a positive
outlook as GDP growth rate of fiscal year 2013-14 was 6.25%. From
all this information we have found that Square Pharma fall into
the Star category.
PURE OBJECTIVE
P Positive Square Encourage the development and diffusion of
environmentally friendly technologies.U Understood Square hold periodic meetings, at least once a
quarter and provide appropriate
decisions/directions and check the improvement,
performance, and clarify what is expected from
employees as well as how it is to be achieved.R Recorded Square usually records all financial statements
Square Pharma
in their archive as well as it is available on
their web site.E Ethical Square believe that, business should work against
corruption in all its forms, including extortion
and bribery.
GREAT Model
G Goals Square strive for top quality health care products at the least cost reaching the lowestrungs of the economic class of people in the country.
R Roles/ Results
Square set all the strategies according to achieve their goals like focusing on R&D, provide specific role to specific employee.
E Expectations / Performance
Square measures their performance quarterly and let the employee know about the expectation from them.
A Accountabilities / Abilities
Square Pharma always set the goal in such a way which is able to achieve by the employee.
T Timing There always should be time frame to achieve the goal within that time, that Square pharma maintain to have the better result.
Market Analysis
Like other sectors, Pharmaceutical Industry also becoming an
important Industry for Bangladesh economy. Although there was a
time when this industry was much neglected, but now it plays a
vital role in GDP growth in Bangladesh. Now there are about 250
pharmaceuticals firms in Bangladesh. Among them some companies
are small sizes and traditional qualities. But a few companies
dominate the whole medicine market like Square, Beximco, Incepta
etc. Compare to others, these companies are quite big and huge
number of product which is enable to meet the local demand as
well as some medicine is being exported.
Now, the leading Pharmaceutical Companies are expanding their
business with the aim to expand export market. Recently few new
industries have been established with hi tech equipments and
professionals which will enhance the strength of this sector.
There are several sectors on which Bangladesh can be proud of and
undoubtedly the pharmaceutical sector is one of these sectors,
rather it is the sector, which is the second-largest contributor
to the government exchequer. There are about 231 companies in
this sector and the approximate total market size is about Taka
76,500 million per year of which about 94% of the total
requirement of medicines is created by the local companies and
the rest 6% is imported. The imported drugs mainly comprise of
the cancer drugs, vaccines for viral diseases, hormones etc. Of
the total pharmaceutical market of Bangladesh, the local
companies are enjoying a market share reaching around 75%, while
the MNCs are having a market share of 25%.
EFE of Square Pharmaceutical Ltd
KEY EXTERNAL FACTORS Weight Rating
WeightedScore
OPPORTUNITIES1.Square has the opportunity to export its products to giant India and USA market.
.20 2 .40
2. Large population in Bangladesh creates an opportunity to Square to serve more in domestic market.
.15 4 .60
3. People now have more affordability as their income is increasing.
.05 3 .15
4. Square should emphasize on innovation more and more.
.10 3 .30
THREATS1. .Recent political turmoil is affecting operation and distribution ofall industries including pharmaceuticalindustry.
.15 3 .45
2. More than 27% tax is charged on pharmaceutical products.
.10 1 .10
3. There is a huge competition from MNCs.
.20 4 .80
4. Recent good performance of Incepta and Beximco pharmaceutical is posing athreat to Square Pharmaceutical.
.05 3 .15
4= the response is superior3= the response is above average2= the response is average1= the response is poor
Rating
Total 1.00 2.95
CPM Analysis of Bangladesh PharmaceuticalIndustry
SquarePharmaceutica
l
BeximcoPharmaceutical
InceptaPharmaceutical
Critical Success Factor
Weight Rating Score Rating Score Rating Score
Advertising .05 3 .15 2 .10 2 .10
Quality of service
.15 4 .60 3 .45 3 .45
Price competitiveness
.15 2 .30 3 .45 4 .60
Management .10 4 .40 3 .30 3 .30
Financial position
.20 4 .80 3 .60 3 .60
Global expansion
.10 3 .30 3 .30 4 .40
Customer loyalty
.15 4 .60 3 .45 3 .45
Market share .10 4 .40 3 .30 3 .30
Total 1.00 3.55 2.95 3.20
4= Major strength; 3= Minor strength; 2=Minor weakness; 1=Major weakness
QSPM of Square Pharmaceutical Key Factors Alternative-1 Alternative-2
Investment in R&D Investment in promotional activities
Weight
Attractiveness score
Total Attractiveness score
Weight Attractiveness score
Total Attractiveness score
Strengths1 In 2013, Square’s growth rateis 16.43% against market growthrate of 8.12%.
.15 1 .15 .05 0 .00
2. Square has highly efficient sales force and large own distribution channel.
.05 0 .00 .20 3 .60
3. Square has good brand image to its consumers.
.20 3 .60 .15 2 .30
4. Square maintains high quality standards for its products.
.10 1 .10 .10 2 .20
Weaknesses1.Square has made delay in introducing some injections that Incepta has introduced earlier and now those are popular.
.15 3 .45 .15 0 .00
2. Square do not spend adequatemoney for R&D sector compared to the nature of industry.
.20 4 .80 .05 0 .00
3. Selling & distribution costsare increasing.
.05 0 .00 .20 3 .60
4. Compared to the MNCs, Squarehas lack of resources.
.10 2 .20 .10 1 .10
Sum weights 100% 100%Opportunities
1. Square has the opportunity to export its products to giantIndia and USA market.
.05 0 .00 .10 1 .10
2. Large population in Bangladesh creates an opportunity to Square to serve more in domestic market.
.10 1 .10 .20 2 .40
3. People now have more affordability as their income is increasing.
.15 0 .00 .15 0 .00
4. Square should emphasize on innovation more and more.
.20 3 .60 .05 0 .00
Threats1..Recent political turmoil is affecting operation and distribution of all industries including pharmaceutical industry.
.05 1 .05 .20 2 .40
2. More than 27% tax is chargedon pharmaceutical products.
.10 0 .00 .10 1 .10
3. There is a huge competition from MNCs.
.20 3 .60 .15 1 .15
4. Recent good performance of Incepta and Beximco pharmaceutical is posing a threat to Square Pharmaceutical.
.15 1 .15 .05 0 .00
Sum Weight 100% 100%
Sum Total Attractiveness Score 3.80 > 2.95
Attractiveness Score: 1 = not acceptable 2 = possibly acceptable 3 = probably acceptable 4 = most acceptable 0 = not relevant
From QSPM Analysis we have got that Square Pharma should go for investment in R&D as the score for 1st alternative is grater than2nd alternative.
Financial Analysis of Square Pharmaceutical
Items Formula 2013-14 2012-13
1. EPS Net income after tax /number of shares
=4,031,811,268/481999263= 8.36
=3,419,785,256/481,999,263= 7.10
2. ROE Net income after tax/Equity
=4,031,811,268/19,052,891,818= 21.16%
=3,419,785,256/16,396,669,416= 20.86%
3. ROA Net income after tax/total assets
=4,031,811,268/23,734,742,933= 16.99%
=3,419,785,256/21,637,553,544= 15.80%
Breakeven Point: Break-Even is a situation where total revenueof a company is exactly equal total cost that the company has
incurred. It is the point of balance between
making either a profit or a loss. The term originates in finance,
but the concept has been
applied widely. The Break Even General Equation (BEP),
Total Revenue = Total Cost;
[Where, Total Cost = Total Fixed Cost + Total
Variable Cost]
Breakeven Analysis of Square Pharma
Analysis and Discussion: According to the Financial report (2013-
2014) of Square Pharma the total Revenue is Tk. 24,96,42,23,232
and the total cost is (4,17,39,64,752+ 11,72,79,92,671)=
15,90,19,57,423. So the Company is in above the breakeven point
as the revenue is (24,96,42,23,232 -15,90,19,57,423) Tk.
9,06,22,65,809 more than the cost.
Competitor analysis
Competitive
factor
Square
pharmaceutical
Incepta
pharmaceutical
BEXIMCO
pharmaceutical
Market position 1 2 3
Turnover 1,511.53 (Cr)
TK
740.96 (Cr) TK 703.86 (Cr) TK
Growth rate 22.03 % 29.17 % 33.14 %
Market share
(100)
18.78 9.21 8.75
Customer’s
Choice of Brand,
Respondent (in
%)
38 16 24
Strength diversified
products and
dosage forms
Backward linkage
support , price
is competitive
diversified
products and
dosage forms
Weakness do not spend
adequate money
for R&D sector
Insufficient
working capital.
R&D, absence of
international
standard quality
control and
testing
laboratoryPrice High Above average Above averageQuality High high Above average
Advertising High Average AverageManagement Average Average AverageFinancial
position
High Above average Above average
Global expansion High High Average
KSF Analysis (Industry Key Success Factors)
1. Customer-related: Square Pharma has Effective distribution,
strong brand name, customer loyalty, market analysis, customized
solution.
2. Product-related: Square Pharma is much more conscious
regarding their product Quality, laboratory, customer oriented
product, product development.
3. Production capability: performance measurement, visualization
of result, maintenance& operation.
4. Cost structure: scheduling, expenses, revenue, reporting, and
procurement.
5. Vertical integration: To gaining control of their entire
supply chain Square Pharma may have gone for Vertical
integration. This integration help to reduce cost, maintain
quality and gain more controlling power over the business.
6. Corporate social responsibility: Through the Square pharma’s
mission and vision statement we have came to know about their
social responsibility, performance culture, sponsorship,
donation, scholarship, financial aid, public relations.
7. Financial strength: Financially Square Pharma is much more
stronger compare to other competitors.
8. Research and development: In the Pharmaceutical industry
Research and development department play a vital role and Square
Pharma is quite conscious about this as well as their laboratory
is technically upgraded.
Strategy Evaluation and Contingency Plan
Strategy Evaluation is as significant as strategy formulation
because it throws light the efficiency and effectiveness of the
comprehensive plan in achieving the desired results. Evaluation
is the final phase of Strategic Management.
Strategic Evaluation consists the following steps:
– Fixing benchmark of performance
– Measurement of performance
– Analyzing Variance
– Taking Corrective Action
Square Pharma fix the benchmark of performance and after a
certain time period like quarterly or yearly, they measure the
performance and take corrective action and even go for the
research if needed. Some time they provide incentive to their
employee for greater performance.
Although Strategy evaluation is necessary for a company but there
is some difficulties as well in Strategy Evaluation:
1. Increase in environment’s complexity
2. Difficulty predicting future with accuracy
3. Increasing number of variables
4. Rate of obsolescence of plans
5. Domestic and global events
6. Decreasing time span for planning certainty
Strategy Evaluation Should –
• Initiate managerial questioning
• Trigger review of objectives & values
• Stimulate creativity in generating alternatives
Contingency Planning is the development of alternative plans to
be placed in effect if certain unexpected events occur.
As Square pharma is a large size firm they may have to face a lot
of obstacle. There for they concerned about the Contingency
Planning, because unexpected events can occur in any time.
There are four reasons for or advantages to contingency planning:
• It helps the firm get into a better position to cope
with unexpected developments
• Indecision, uncertainty and delays are reduced when
something unusual happens
• the firm's responses are likely to be better thought
out and more rational; and
• Managers are forced to think in terms of possible
outcomes, rather than just the most likely outcome.
Recommendation
Although Square Pharma is operating successfully in the market,
there we have got some recommendation for Square Pharma-
1. They should invest more in R&D sector.
2. They should be more careful in terms of pricing of their
product.
3. As the market is so much competitive, Square Pharma
should be more concern regarding their product quality.
4. They can go for Backward or forward integration support
to reduce production and distribution cost.
5. They should more focus on customer oriented product
6. They need to Emphasize on high technology
Conclusion
Square Pharmaceuticals Ltd. was established as a partnership firm
in 1958. In 1991 it was converted into a public limited company.
Square Pharmaceuticals Limited is the largest pharmaceutical
company in Bangladesh and it has been continuously in the
1st position among all national and multinational companies since
1985. Since 1987 Square has taken aggressive measures to explore
new countries as potential export market. It pioneered exports of
medicines from Bangladesh in 1987 and has been exporting
antibiotics and other pharmaceutical products. More & more
countries are getting confidence in Square’s product every year.
But it’s true that in the competitive global environment Square
is still struggling to ensure firm footings in global market.
Square is the flagship Parma Company in Bangladesh, wants to be a
global player.
SQUARE Pharmaceuticals Limited has extended its range of services
towards the highway of global market. This extension in business
and services has manifested the credibility of Square
Pharmaceuticals Limited
ReferencesPrimary source:
1.Text Book Strategic Management concepts and cases 13th edition
by Fred R.David page 13
Secondary sources:
1.http://www.squarepharma.com.bd/
2.http://www.inceptapharma.com/all-products.php
3. http://www.beximco-pharma.com
4.http://medibd.blogspot.com/2011/11/top-50-pharmaceutical-
company.html
5. http://www.healthprior21.com/drug-index
6. http://banglajol.info/index.php/BPJ/issue/view/1320
7. http://www.scribd.com/doc/98542991/Porter-s-five-force-model-and-Ratios-analysis-of-SQUARE-Pharmaceutical#scribd