Term Paper on “Incepta Pharmaceuticals Ltd.”: Term paper on Incepta Pharmaceuticals Ltd. by Bang-er-Chata AIUB 2015

American International University – Bangladesh (AIUB)

Term Paper on

“Incepta Pharmaceuticals Ltd.”

A Term Paper Presented to the Faculty of Business Administration in Partial Fulfillment of the Requirements for the Degree of Masters of Business Administration.

Supervised By:

Prof. Dr. Md. Mahmodul Hasan

Faculty of Business Administration (MBA Program)

American International University – Bangladesh (AIUB)

Submitted by:

Bang-er-Chata

Stategic Management_Code:01412_Section:A

Sl. No.	Name	ID	Sign
01.	Anita, Sharmin	14-97884-2	Anita
02.	Sarker, Francis Shawon	14-97746-2	Francis
03.	Saifullah, Mohd. Shafiq	12-96182-3	Shafiq
04.	Islam Mohammed Tajimul	14-97784-2	Tajimul

Date of Submission: 19^th April, 2015

Letter of Transmittal

19^th April, 2015

Prof. Dr. Md. Mahmodul Hasan

Faculty of Business Administration (MBA Program)

American International University – Bangladesh (AIUB)

Banani, Dhaka- 1213

Subject: - Submission of term paper on Incepta Pharmaceuticals Ltd.

Dear Sir,

Here is the term paper that you have assigned us as the partial fulfillment of the Degree of Masters of Business Administration.

We have prepared our Term paper on “Incepta Pharmaceuticals Ltd.” which we are submitting along with this letter. It was an energizing experience throughout semester and preparing this term paper further enhanced our insight about how corporate level activities are being done.

The term paper is aimed to give an overview of how Strategic Management takes place in Incepta Pharmaceuticals Ltd.. We hope that the analysis that we have carried out is up to your expectations. It has been an insightful experience for us and we tried our best to follow the tenets of internship report.

Sincerely yours,

Bang-ar-Chata

Strategic Management _Code: 01412_ Section: A

Sl. No.	Name	ID	Sign
01.	Anita, Sharmin	14-97884-2
02.	Sarker, Francis Shawon	14-97746-2
03.	Saifullah, Mohd. Shafiq	12-96182-3
04.	Islam Mohammed Tajimul	14-97784-2

ACKNOWLEDGEMENT

This term paper is made possible through the help and support from everyone, including: parents, teachers, family, friends, and in essence, all sentient beings. Especially, please allow us to dedicate our acknowledgment of gratitude toward the following significant advisor:

First and foremost, we would like to thank Prof. Dr. Md. Mahmodul Hasan for his most support and encouragement. He kindly read our paper and offered invaluable detailed advices on grammar, organization, and the theme of the paper.

Finally, we sincerely thank to our parents, family and friends, who provide the advice and other support. The product of this research paper would not be possible without all of them.

EXECUTIVE SUMMARY

Incepta Pharmaceuticals Ltd. is a leading pharmaceutical company in Bangladesh established in the year 1999. The company has a very big manufacturing facility located at Savar, 35 kilometer away from the center of the capital city Dhaka. The company produces various types of dosage forms which include tablets, capsules, oral liquids, ampoules, dry powder vials, powder for suspension, nasal sprays, eye drops, creams, ointments, lotions, gels, prefilled syringes, liquid filled hard gelatin capsules, lyophilized injections, human vaccine etc. Since its inception, Incepta has been launching new and innovative products in order to fulfill unmet demand of the medical community. The focus has always been to bring new, more technologically advanced molecules and innovative dosage forms to this country.

Table of contents

Serial no.	Particulars	Page no.
1	Letter of Transmittal	i
2	Acknowledgement	ii
3	Executive Summary	iii
4	Introduction	1-2
5	Definition of Strategy	3
6	Most Strategic Model	4
7	Organogram	5
8	PESTEL/ SWOT	6-10
9	Value Chain Analysis	10-11
10	Porter’s 5 forces Analysis, SMARTER Model	11-15
11	SWAN Analysis. ViSA Model	15-16
12	The BCG Matrix	17-18
13	Competitor Analysis, Market Analysis Including Market Segmentation	18-19
14	QSPM Analysis	20-23
15	EFE Matrix	24
16	CPM Matrix	25
17	TOWS Matrix	26-27
18	KSF Analysis (Industry key Success Factor)	27-29
19	Financial Analysis	29-31
20	Market Analysis and Market Segmentation	32
21	Recommendation	33
22	Conclusion	34
23	References	35
24	Appendix	36+

Introduction

The pharmaceutical market in Bangladesh remains tiny compared to the population size because of the lack of spending power of the population. Pharmaceutical spending is also amongst the lowest in the world in per capita terms. Healthcare expenditures consist of only 3.4% of GDP. However, the increased awareness of healthcare and the government’s increased expenditure in this sector is causing the demand to increase in this sector. In addition to the demand of therapeutic drugs, the demand for “wellness” drugs such as vitamins and minerals are increasing gradually and the future growth of the sector lies in it.

Surprisingly, the pharmaceutical sector, which is widely regarded as a “hi-tech” industry, is the most developed among the manufacturing industries in Bangladesh. Roughly 250 companies are operating in the market. According to IMS, a US-based market research firm, the retail market size is estimated to be around BDT 55 billion, which grew by 16.8% in 2009. The market size in 2008 was BDT 47 billion with a growth of 6.9%. The actual size of the market may vary slightly since IMS does not include the rural market in their survey. However, the deviation is estimated to be not more than 5-10% in either direction. Unfortunately, there is no solid information source in Bangladesh other than IMS. The retail market is about 90% of the total market. In that respect, the total market size is more than BDT 60 billion.

Bangladesh’s pharmaceutical industry contributes almost 1% of GDP. It is the third largest tax paying industry in the country. Bangladeshi pharmaceutical firms focus primarily on branded generic final formulations using imported APIs (Active Pharmaceutical Ingredients).

Incepta Pharmaceuticals Ltd.

The vision of Incepta is to become a research based global pharmaceutical company in addition to being a highly efficient generic manufacturer. They would also like to discover and develop innovative, value-added products that improve the quality of life of people around the world and significantly contribute towards the growth of Bangladesh. Pharma experts said that both Beximco Pharma and Incepta are now in neck-and-neck position as both the companies have attained around 27 per cent growth in the country's pharmaceutical market.

Definition of Strategies

Strategies are the means by which long-term objectives will be achieved. Business strategies may include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint ventures. Strategies currently being pursued by some companies are. Strategies are potential actions that require top management decisions and large amounts of the firm’s resources. In addition, strategies affect an organization’s long-term prosperity, typically for at least five years, and thus are future-oriented. Strategies have multifunctional or multidivisional consequences and require consideration of both the external and internal factors facing the firm. 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.

The Strategic-Management Model

The strategic-management process can best be studied and applied using a model. Every model represents some kind of process. The framework illustrated in Figure 1-1 is a widely accepted, comprehensive model of the strategic-management process.13 This model does not guarantee success, but it does represent a clear and practical approach for formulating, implementing, and evaluating strategies. Relationships among major components of the strategic-management process are shown in the model, which appears in all subsequent chapters with appropriate areas shaped to show the particular focus of each chapter. These are three important questions to answer in developing a strategic plan:

· Where are we now?

· Where do we want to go?

· How are we going to get there?

Identifying an organization’s existing vision, mission, objectives, and strategies is the logical starting point for strategic management because a firm’s present situation and condition may preclude certain strategies and may even dictate a particular course of action. Every organization has a vision, mission, objectives, and strategy, even if these elements are not consciously designed, written, or communicated.

Organogram

A diagram that shows the structure of an organization illustrating the relationships between the different people, departments, or jobs within that organization. The information is usually shown in rectangles, circles, or squares that are connected by straight lines. Also it is a diagram that shows the structure of an organization and the relationships between the different people, departments, and jobs at different levels within that organization:

PESTEL Analysis

A PESTEL analysis is a framework or tool used by marketers to analyze and monitor the macro-environmental (external marketing environment) factors that have an impact on an organization. The result of which is used to identify threats and weaknesses which is used in a SWOT analysis.

PESTEL stands for:

P – Political
E – Economic
S – Social
T – Technological
E – Environmental
L – Legal

PESTEL Analysis of Incepta Pharmaceuticals

Political	Economical
1. Growing political focus and pressure on healthcare 2. With the change of government power, export- import policies changes. 3. For pharmaceutical industry, government do not allocate proper budget through fiscal policy 4. Foreign Governments looking for healthcare savings 5. Harmonization of healthcare across the country.	1. Currency fluctuation has significant impact on pharmaceutical industry. 2. Increased pressure on pricing of drugs. 3. Cheap labor cost lead to an increase in profit margin for this industry. 4. Recent growth figures have proved to be better than the projection, which demonstrates that the growth prospect of the sector is justified. 5. Recession in Global economy.
Social	Technological
1. Population of Bangladesh is continuously increasing which boost this industry. 2. Poor people cannot buy the expensive medicines. 3. Patent awareness increasing with changing expectations. 4. Patient and public activism is also increasing (harnessing new social networking technologies)		1. Incepta is trying to upgrade and adopt new technology in production, quality control, distribution and administration of its products. 2. Pharmaceutical is a high-tech rapidly propagating industry. 3. More responsive service facilities for direct communication with the patients are required. 4. The machinery and raw materials for API manufacturing are also have to be imported.
Environmental		Legal
1. According to UN, business should support a precautionary approach to environmental challenges. 2. Growing environmental agenda and community awareness. 3. Concern for the ecosystem is very high 4. Compliance with the anti-pollution legislation and regulation of disposal of waste streams.		1. WHO's current good manufacturing practices (CGMP) should be strictly followed by the companies. 2. Global inconstancy increasing 3. Increased litigation in the pharmaceutical Industry 4. The industry requires more rationalization. 5. Monitoring and supervisory role of DDA also affects the production and distribution.

SWOT Analysis

A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, straightforward model that assesses what an organization can and cannot do as well as its potential opportunities and threats. The method of SWOT analysis is to take the information from an environmental analysis and separate it into internal (strengths and weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT analysis determines what may assist the firm in accomplishing its objectives, and what obstacles must be overcome or minimized to achieve desired results.

SWOT Analysis of Incepta Pharmaceuticals

Strengths	Weaknesses
1. In 2013, Incepta’s growth rate is 15.64% against market growth rate of 11.36%. 2. Brand recognition nationwide and in foreign countries and maintenance of high quality standard. 3. Built-in positive impression of the medicines in the minds of doctors and patients. 4. Healthy domestic market with rising per capita expenditure enables the company to gain economies of scale. 5. Incepta has strong distribution channel, and inventory system.	1. Lack of investment and knowledge based workforce thus hindering R&D 2. Incepta does not spend adequate money for R&D sector compared to the nature of industry. 3. Selling & distribution costs are increasing. 4. Underdeveloped backward linkage of API Manufacturing. 5. Inadequate manufacturing practices due to the absence of state of the art equipment’s and machineries. 6. The initial investment and the production scale required are high for therapeutic drugs.
Opportunities	Threats
1. Incepta has a wide access to import its products to giant India and USA market. 2. Innovation and invention is an ongoing process in the pharmaceutical industry. 3. Favorable regulatory authority for domestic manufacturers 4. Promising market for Contract Manufacturing in the Pharmaceutical industry 5. The increased demand for “wellness” drugs as well as government expenditure is viable.	1. With the change of government power, export- import policies changes. 2. Rapid currency fluctuation has significant impact on pharmaceutical industry. 3. There is a huge competition from MNCs and transformation of process patent to product patent (TRIPS) 4. The domestic market is highly concentrated and competitive. 5. Dependency on imporeted raw materials and absence of API.

Value Chain of Analysis of Incepta Pharmaceuticals

Incepta has a large distribution network that covers the whole country and makes products available in every single drug store. The Distribution centers are located in 18 major cities across Bangladesh. Products are supplied on a daily basis to all the major cities and towns of the country. Remote areas are also supplied rhythmically to ensure timely availability of products to all customers.

There is a large fleet of transport including refrigerator trucks for supplying temperature sensitive products to retail shops around the country. Cold chain system is employed to products which need strict temperature control. Storage of these products is also maintained using refrigerators with backup power supply to ensure maintenance of standardized environment.

Michael Porter’s Five Forces Model

Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates.

The external environment of the pharmaceutical industry of Bangladesh has been analyzed to determine the five forces:

Bargain of Customer: LOW

· Consumer has no choice but to buy medicine as per the physician’s instruction.

· Retail buyers of medicines and drugs are not united rather scattered.

· Lack of price control due to the legal and political tug of war.

Bargain of Supplier: LOW

· Pharmaceutical industry depends upon organic chemicals which are easy to produce and comparatively cheaper in our country. So the producers have zero bargaining power.

· Chemical industry is very competitive and fragmented and thus resulting in low switching cost.

· Mostly the raw materials are imported and Incepta, like other companies have their own registered foreign suppliers.

Rivalry among Existing firms: HIGH

· The number of pharmaceutical companies is highly concentrated.

· Except for the market leaders most of the firms are similar in terms of size, revenue and market share.

· Product Differentiation is very high ranging from simple to sophisticated medicines

· Cost competitiveness is very high

Threat of Substitute products: LOW

· One of the biggest advantages of the pharmaceutical industry.

· Demand of substitute products is constant in the thriving industry.

· Biotechnological development brings about development in creating Synthetic pharmacy drugs.

Threat of New entrants: HIGH

· Capital Requirements for introducing a pharmaceutical company are low for the local firms, thus with minimal know how and expertise a company can be launched.

· Creating a regional distribution network has become easier in the past decades which enable the firms to get a fair share of the distribution channel.

Industry Competition: PURE COMPETITION

Pure competition or perfect competition is a market situation where the market for a particular product is highly saturated with so many consumers and producers that no entity has control over pricing

· The pharmaceutical company is highly dynamic and competitive

· There are too many active players in the market

· The growth is gradual but visibly positive and opportunity is high because of little or no substitute products.

· Easy to access in the industry but difficulty arise in retention because of fierce competition.

· Emergence of a large number doctors passing out of medical colleges add up to the competition of the industry.

Smart Model

The SMART Model is a tool used to ensure that agreed-upon Objective(s) will lead to the desired result and can be measured and/or evaluated. Writing clear, specific Objectives is a critical step in maximizing the Performance Development Process. Answering the questions in the chart below will help write an Objective that meets the SMART Model criteria.

SMART Model for Incepta Pharma

S- Our vision is to become a research based global pharmaceutical company in addition to being a highly efficient generic manufacturer.

M- Provide people globally with high quality health care products at affordable prices in order to improve access to medicine and to provide employees an enabling environment that facilitates realization of their full potential.

A – They would also like to discover and develop innovative, value-added products that improve the quality of life of people around the world and significantly contribute towards the growth of Bangladesh.

R- Incepta is committed to introduce more technologically advanced quality products at an affordable price in the future.

T- Incepta has been launching new and innovative products in order to fulfill unmet demand of the medical community. The focus has always been to bring new, more technologically advanced molecules and innovative dosage forms to this country.

SWAN Analysis:

Strengths:

1. In 2013, Incepta’s growth rate is 16.43% against market growth rate of 8.12%.

2. Incepta has good brand image to its consumers.

Weaknesses:

1. Incepta does not spend adequate money for R&D sector compared to the nature of industry.

2. Selling & distribution costs are increasing.

Actions:

1. Incepta should try to control over its non manufacturing costs specially selling and distribution costs.

2. With the amount of retained earnings, Incepta should invest on R & D sectors.

Next Step:

Incepta should look forward to innovation through Research and Development and technological advancement.

VISA Model

VISA Model of Incepta Pharmaceuticals

V: Incepta began its operation with a handful of highly skilled and dedicated professionals guided by an able leadership. Proper strategic planning, technical excellence, swift and timely decisions helped us achieve our objectives leading to much faster growth.

I: Incepta now has one of the largest and competent sales force and large distribution network of its own, operated from 18 different locations throughout the country.

S: A most dynamic skilled and dedicated marketing team comprising of pharmacists and doctors are at the core of the marketing operation.

A: These highly skilled professionals play a crucial role in providing the necessary strategic guideline for the promotion of its product.

BCG Matrix

The framework of BCG Matrix assumes that an increase in relative market share will result in an increase in the generation of cash. This assumption often is true because of the experience curve; increased relative market share implies that the firm is moving forward on the experience curve relative to its competitors, thus developing a cost advantage. A second assumption is that a growing market requires investment in assets to increase capacity and therefore results in the consumption of cash. Thus the position of a business on the growth-share matrix provides an indication of its cash generation and its cash consumption. The four quadrants or domains of BCG Matrix are categorized as:

Stars	Question marks
Cash cows	Dogs

BCG Matrix of Incepta Pharmaceuticals

BCG basically deals with two variables-

(1) Relative market share (2) Industry growth

In our term paper we showed Incepta is in the Star domain. According to the data of 2013 stock market, Incepta has captured the highest market share in pharmaceutical industry which is worth of TK 1,198 crore. It signifies the dominant position of Incepta’s in stock market. Besides in 2013, the national market growth of pharmaceutical industry is 11.36% whereas Incepta’s growth rate is 15.64%. It indicates a positive viewpoint as GDP growth rate of fiscal year 2013-14 was 6.25%.

Market Growth of Incepta Phrmaceuticals

Competitor Analysis

Domestically, the pharmaceutical companies of Bangladesh including the locally based MNCs produce 95%-97% of the drugs and the rest are imported. Although about 250 pharmaceutical companies are registered in Bangladesh, less than 100 are actively producing drugs. The domestic market is highly concentrated and competitive. However, the local manufacturers dominate the industry as they enjoy approximately 87% of market share, while multinationals hold a 13% share.

Another notable feature of this sector is the concentration of sales among a very small number of top companies. The top 10 players control around two-third of the market share while the top 15 companies cover 77% of the market. In comparison, the top ten Japanese firms generated approximately 45% of the domestic industry revenue, while the top ten UK firms generated approximately 50%, and the top ten German firms generated approximately 60%.

Square Pharmaceuticals is the stand out market leader with a market share of 19.3% which posted domestic revenue of BDT 11.2 billion in the last four quarters (Apr 09 - Mar 10). Their nearest competitors are Incepta Pharmaceuticals and Beximco Pharmaceuticals with market shares of 8.5% and 7.6%.

Market Share Concentration

Domestic Market Share of Companies

QSPM (Quantitative Strategic Planning Matrix) of Incepta Pharmaceuticals

	Alternative 1			Alternative 2
	Expand local market share			Expand foreign market share
Key Factors	Weight	Attractiveness Score	Total Attractiveness Score	Weight	Attractiveness Score	Total Attractiveness Score
Strengths
1. Incepta’s growth rate is 15.64% against market growth rate of 11.36%.	0.15	2	0.30	0.10	1	0.10
2. Brand recognition nationwide and in foreign countries and maintenance of high quality standard	0.12	3	0.36	0.12	2	0.24
3. Built-in positive impression of the medicines in the minds of doctors and patients.	0.16	1	0.16	0.15	4	0.60
4. Incepta has strong distribution channel, and inventory system.	0.12	4	0.48	0.10	3	0.30
Weaknesses
1. Lack of investment and knowledge based workforce thus hindering R&D.	0.08	3	0.24	0.12	1	0.12
2. Incepta does not spend adequate money for R&D sector compared to the nature of industry.	0.10	1	0.10	0.16	4	0.64
3. Selling & distribution costs are increasing.	0.12	2	o.24	0.o9	3	0.27
4. The Underdeveloped backward linkage of API Manufacturing	0.15	4	o.60	0.16	2	0.32
Sum Weights	1.00			1.00
Opportunities
1. Incepta has a wide access to import its products to giant India and USA market.	0.08	2	o.16	0.15	4	0.60
2. Innovation and invention is an ongoing process in the industry.	o.16	3	0.48	0.20	2	0.40
3. Favorable regulatory authority for the domestic manufacturers.	o.10	2	0.20	0.12	0	0.00
4. The increased demand for “wellness” drugs as well as government expenditure is viable.	0.08	4	0.32	0.09	1	0.09
5. Promising market for Contract Manufacturing in the Pharmaceutical industry.	0.09	2	0.18	0.14	3	0.42
Threats
1. Huge competition from MNCs and transformation of process patent to product patent (TRIPS)	0.09	4	0.36	0.12	3	0.36
2. The domestic market is highly concentrated and competitive.	0.14	3	0.42	0.o8	0	0.00
3. Dependency on imported raw materials and absence of API.	0.16	2	0.32	0.10	1	0.10
Sum Weights	1.00

Sum Total Attractiveness Score

4.92

4.56

Attractiveness Score:

· 1= Not Acceptable

· 2= Possibly Acceptable

· 3= Probably Acceptable

· 4= Most Acceptable

· 0= Not Relevant

The evaluation of QSPM shows that the 1^st alternative of Expand local market share scores 4.92 whereas the 2^nd alternative of Expand foreign market share scores 4.56. thus the 1^st alternative is chosen over the 2^nd, as the 1^st alternative is greater than (>) the 2^nd alternative.

EFE (External Factors Evaluation) Matrix of Incepta Pharmaceuticals

External Factors	Weight	Rating	Weighted Score
Opportunities
1. Incepta has a wide access to import its products to giant India and USA market.	0.15	3	0.60
2. Innovation and invention is an ongoing process in the pharmaceutical industry.	0.10	3	0.30
3. Favorable regulatory authority for domestic manufacturers.	0.20	2	0.40
4. Promising market for Contract Manufacturing in the Pharmaceutical industry.	0.05	4	0.20
Threats
1. With the change of government power, export- import policies changes.	0.10	2	0.20
2. Rapid currency fluctuation has significant impact on pharmaceutical industry.	0.05	2	0.20
3. The domestic market is highly concentrated and competitive.	0.15	3	0.45
4. Dependency on imporeted raw materials and absence of API.	0.20	4	0.60

4: the response is superior 3: the response is above average 2: the response is average 1: the response is poor	Rating
Total	1.00	2.95

The evaluation of EFE Matrix reveals the Incepta Pharmaceuticals attains a score of 2.95.

CPM (Competitive Profile Matrix) of the Pharmaceuticals Industry in Bangladesh

		Beximco Pharmaceuticals		Incepta Pharmaceuticals		Square Pharmaceuticals
Critical Success Factors	Weight	Rating	Score	Rating	Score	Rating	Score
Advertising	0.20	3	0.60	2	0.40	4	o.80
Quality of Service	0.10	3	0.30	2	0.20	4	o.40
Price Competitiveness	0.10	3	0.30	3	0.30	3	0.30
Management	0.10	2	0.20	2	o.20	3	0.30
Financial Position	0.15	3	0.45	3	0.45	4	0.60
Global Expansion	0.20	3	0.60	3	0.60	4	0.80
Customer Loyalty	0.10	3	0.30	2	0.30	4	0.40
Market Share	0.05	3	0.15	3	0.15	4	0.20
Total	1.00	2.90		2.60		3.80
*4: Major Strength; 3: Minor Strength; 2: Minor Weakness; 1: Major Weakness*

From the derivation of Competitive Profile Matrix (CPM) it is clearly visible that Square Pharmaceuticals is the market leader in the industry with a total score of 3.8o. Incepta and Beximco score 2.60and 2.90 respectively acquiring a 3rd and 4^th position in the industry.

TWOS Matrix

TOWS/ SWOT MATRIX	STRENGTHS	WEAKNESSES
	1. In 2013, Incepta’s growth rate is 15.64% against market growth rate of 11.36%. 2. Brand recognition nationwide and in foreign countries and maintenance of high quality standard. 3. Built-in positive impression of the medicines in the minds of doctors and patients. 4. Healthy domestic market with rising per capita expenditure enables the company to gain economies of scale. 5. Incepta has strong distribution channel, and inventory system.	1. Lack of investment and knowledge based workforce thus hindering R&D 1. Incepta does not spend adequate money for R&D sector compared to the nature of industry. 2. Selling & distribution costs are increasing. 3. Underdeveloped backward linkage of API Manufacturing. 4. Inadequate manufacturing practices due to the absence of state of the art equipments and machineries. 5. The initial investment and the production scale required are high for therapeutic drugs.
OPPORTUNITIES	SO Strategies	SW Startegies
1. Incepta has a wide access to import its products to giant India and USA market. 2. Innovation and invention is an ongoing process in the pharmaceutical industry. 3. Favorable regulatory authority for domestic manufacturers 4. Promising market for Contract Manufacturing. 5. The increased demand for “wellness” drugs as well as government expenditure is viable.	Through Contract Manufacturing it could gain more access to the foreign countries n attain global expansion. Also by increasing the domestic manufacturing the company could also earn a huge amount of foreign currency through exporting.	Through innovation and R&D development, Incepta could take the advantage of increasing growth of the pharmaceutical industry and increase its market share through acquisition of smaller firms and investing more in purchasing high quality machineries, equipment and raw materials.
THREATS	ST Strategies	WT Strategies
1. With the change of government power, export- import policies changes. 2. Rapid currency fluctuation has significant impact on pharmaceutical industry. 3. There is a huge competition from MNCs and transformation of process patent to product patent (TRIPS) 4. The domestic market is highly concentrated and competitive. 5. Dependency on imported raw materials and absence of API.	To fight against the competition of MNCs and other local firms the company can invest more and acquire smaller sized companies to increase its current market share. Incepta could also increase its patent for drugs and manufacturing process. Promotional activities are augmented so that the brand image is more established.	Instead of importing the raw materials and API for drug manufacturing from foreign suppliers it could rather seek for quality local supplies so that manufacturing process becomes cost effective. Investment should be brought about installation of high–tech equipment and machineries.

Industry Key Success Factors (KSFs)

An industry's key success factors (KSFs) are those things that most affect industry members' ability to prosper in the marketplace-the particular strategy elements, product attributes, resources, competencies, competitive capabilities, and business outcomes that spell the difference between profit and loss and, ultimately, between competitive success or failure. KSFs by their very nature are so important that all firms in the industry must pay close attention to them.

Marketing – related KSF

Around 4000 individuals from diverse disciplines including pharmacy, microbiology, and business administration, accounting, engineering and medicine are working nationwide under the umbrella of Incepta. All the skilled and professional personnel are set at their very appropriate responsible positions. Their sales team comprising highly professional science graduate and post-graduate people are involved in the timely and smooth promotion of our products for the benefits of our doctors, people as well as the whole nation.

Technology – related KSF:

Incepta had positioned itself as an innovative research oriented and knowledge based pharmaceutical company specializing in analysis, design and development of new products. Incepta have a separate Galenical laboratory for R & D, equipped with all the necessary machineries & equipments of GMP standard in small scale for the team to develop products.

Manufacturing – related KSF:

Continued investment in the core strength of Incepta and their manufacturing plant led to recognition from European authorities and Incepta attained European "Certificate of GMP Compliance". Manufacturing and packaging operations are carried out according to the validated methods through systematically qualified machines with full documentation at all stages of operations.

Distribution – related KSF:

The production sites follow the cGMP guidelines for environmental requirements of the manufacturing and packaging area, as well as comply with the EHS requirements. Storing of raw and packaging materials meet the requirements of production and also storing and dispatch of finished products as per concept of Good Storage Practice of pharmaceuticals.

Skills and Capability – related KSF:

Incepta began its operation with a handful of highly skilled and dedicated professionals guided by an able leadership. Proper strategic planning, technical excellence, swift and timely decisions helped us achieve our objectives leading to much faster growth.

Financial Analysis

The following financial statement analysis provides detailed financial ratios for the past three years. Financial ratios include profitability, margins and returns, liquidity and leverage, financial position and efficiency ratios.

Return on Equity (ROE):

Return on Equity (ROE) = Net Income / Shareholders’ Equity

Particulars	2014	2013	2012
Net Income	42,409,867	35,038,975	7,980,450
Shareholder’s Equity	14,69,561,645	8,20,753,884	2,68,743,873
NI/SE	0.028	0.042	0.029

Comments: From the above graph we can see that Return on Equity in 2012 is 0.029, in 2013 which is increased to 0.042 &which has been decreased to 0.028 in 2014.

Return on Asset (ROA):

Return on Asset (ROA) = Net Income / Total Asset

Particulars	2014	2013	2012
Net Income	42,409,867	35,038,975	7,980,450
Total Asset	18,63,279,246	11,80,904,398	2,95,954,898
NI/TA	0.023	0.029	0.027

Comments: From the above graph we can see that Return on Asset in 2012 is 0.027, which has been increase to 0.029 in 2013 and which has been decreased to 0.023 in 2014.

Earnings Per Share (EPS):

Earnings Per Share (EPS) = Net Profit or Income / No. of Share Outstanding

Particulars	2014	2013	2012
Net Profit	42,409,867	35,038,975	7,980,450
No of share Outstanding	81,995,000	81,995,000	48,000,000
EPS	0.52	0.43	0.17

Comments: From the above graph we can see that Earning Per Share in 2012 is 0.17, which has been increased to 0.52 in 2014.

Market Analysis and Market Segmentation

In Bangladesh, promotion of pharmaceutical products in the mass media is strictly prohibited. Market and sales promotional activities are carried out by field level sales force. Incepta has its own sales at local and international level. Required transport facilities are given to the sales force in the field to visit doctors, healthcare centers, hospitals, and private practitioners. Incepta has its own transportation vehicles, like trucks, cargo trucks, etc. The pharmaceutical market comprise of pure or perfect competition where there are a huge number of players actively competing against each other. Every drug manufacturing company has their own inventory system their own transportation vehicles, like trucks, cargo trucks, etc. The warehouse of Incepta is an enclosed building and protects the stored goods from environmental influences. They are secured against fire by the design of the buildings and technical facilities.

Activities like organizing trade missions and group visits to international trade fairs, displaying pharmaceutical product and some other events, studies, seminars, training are helping promoting trade. The pharmaceutical market is generally segmented based on geographic segmentation, i.e. nationwide or globally the market is divided based on the geographic location.

Recommendation

Strengthen norms, standards and policy options; promote equality if medical products, vaccines and technologies.
Efficient procurement systems to combat counterfeit and substandard medical products, vaccines and technologies.
Promote good governance and transparency in procurement and medicines pricing.
Strengthening capacity of drug administration authority.
Ensure equitable access, rational use and adherence to quality medicine.
Monitor quality and safety of products/vaccines/technologies.
Establish Active Pharmaceutical Ingredients (API) facilities, which could enable local pharmaceutical companies to produce raw materials.

Conclusion

Bangladesh is one of the weak economy developing countries in the world where about 80% of the population are living below the poverty line. So, “Malnutrition and Poor Health Conditions” exist. The population growth is still there and gradual increase in health consciousness among mass people is taking place. All these factors have positive impact on the demand of the pharmaceutical products. As a result, the demand for imported raw materials will also increase.

The pharmaceuticals sector is the second largest sector after agriculture that contributes to the revenue generation of the Bangladesh Government. The sector has growth potentials both in local and export market. There is an increasing trend in the export of pharmaceuticals that indicates very good prospects for the country.

References

www.google.com

www.scribd.com

www.academia.edu

www.wikianswers.com

Annual Report of Incepta Pharmaceuticals: 2012, 2013, 2014

TB: Strategic Management 13^th Edition by Fred R. David