Term Paper on Square Pharmaceuticals

Ltd. Bangladesh

Submitted toProf Dr. M. Mahmodul Hasan

Faculty of MBA Program (AIUB)

Submitted bySultana Sharmin 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