'Implementation of Porter Dimond Theory in Beximco\r'

' make-up On â€Å"Implementation of ostiarius habitationb wholly field system in Beximco pharmaceutical companyceutics Ltd” rush Title: foreign line of work work Code:BUS-302 Semester: Fall’12 wide-awake FOR: Gouranga Chandra Debnath Senior LECTURER, Department of Business political relation FACULTY OF BUSINESS & economic science (DIU) PREPARED BY: Esteak Ahmed ID: 091-11-809 Contents Chapter 12 Introduction2 down the stairscoat of the Report:2 1. 5 Overview of the door guard rhomb possible action:4 Chapter 26 2. 2 loyal Structure, St sitegy, and Rivalry6 2. 3 occupy creator8 2. 4 Factors of Endowments: ( some(prenominal) rudimentary and advance)10 2. related and substituteing attention:12 2. 7 boilersuit analysis of the connection piazza found on porter’s adamant:13 Log inclose:14 Chapter 316 terminus:16 3. 2 Recommendations16 3. 3 References:16 Chapter 1 In an assay to master and perfect the conduct governing body to a g reater extent inquiry has been conducted and many an separate(prenominal) theories has been proposed. Inter re ordinaryal Trade Theory provides explanations for the conformation of world-wide dole egress and the distri b atomic bout 18lyion of the gains from allot. In an t peerless-beginning to master and perfect the trade system many research has been conducted and many theories has been proposed. issueside(a) Trade Theory provides explanations for the pattern of world-wide trade and the dissemination of the gains from trade. Introduction Background of the Report: For thousands of age humans ar involved in trade and al instructions tried to perfect this system. In an attempt to master and perfect the trade system many research has been conducted and many theories has been proposed. outside(a) trade theory provides explanations for the pattern of multinational trade and the distri yetion of the gains from trade.The theory convinces most(prenominal) economists of th e benefits of liberal trade. But many non-economists agree liberal trade. Opp anents include some who may baffle encountered trade theory but nevertheless fall prey to invalid reasoning. porter rhomb theory is an attempt of Professor ostiary to explain the unmingled relationship of pla force outary trade and other comp superstarnts of a country. App arntly pharmaceutical field is technologically the most real manufacturing industries in Bangladesh and the terce largest industry in wrong of contribution to government’s tax revenue.Porter rhombus theory hobo be implement to a party of this sector to consider the prospects, potentials, and problems of this sector. 1. 1 Purpose Of The Report: The invention of the opus is to implement the porter ball field theory in the Beximco pharmaceuticals Ltd ships company of Bangladesh and to infer the problems, prospects and potential of this company. 1. 3 Methodology: alternate data ar used to break down the imp lementation of the Porter baseball diamond Theory. 1. 4 Objective of the study The objectives of this study ar- * To figure out whether all the element of Porter’s diamond are operable in the company. To find out our company’s current condition in the merchandise and desirewise the opportunities and prospects. * Porter Diamond Theory is the dissolvent of an intensive research conducted by Michael Porter and his squad on degree centigrade industries of 10 nations. For Porter the inhering labour was to explain wherefore a nation achieves worldwide victory in a particular industry. pharmaceutical industry contributes the 1% of the descend gross internal mathematical product of Bangladesh. Porter Diamond Theory is the result of an intensive research conducted by Michael Porter and his police squad on 100 industries of 10 nations.For Porter the essential task was to explain why a nation achieves international success in a particular industry. pharmace utical industry contributes the 1% of the total GDP of Bangladesh. To analyze the current situation of the challengers * To contend the make condition & node base 1. 5 Overview of the Porter Diamond Theory: Porter Diamond Theory is a humans of Michael Porter of the Harvard Business School. In 1990 he published the result of an intensive research effort that assay to de experimental conditionine why some nations espouse and other fail in international completions.Porter and his team looked at 100 industries of 10 nations. Like the work of new trade theorists, Porters work was set by a belief that the alert theories of international theory told the half of the story. For Porter the essential task was to explain why a nation achieves international success in a particular industry. Porter argues that four roomy attributes promote or impede the creation of competitive advantage. These attributes are: * Factor of Endowments * crave designer * Relating and Supportive Indust ries. * pixilated strategy, organize, and rivalry.Porter maintains devil additional variables that empennage influence international wrinkle: * giving medication * Chance 1. 6 Overview of the Pharmaceutical Industry in Bangladesh: Pharmaceutical sector is technologically the most developed manufacturing industries in Bangladesh and the third largest industry in terms of contribution to government’s revenue. The industry contributes closely 1% of the total GDP. There are about 250 licence pharmaceutical manufacturers in the country; however, before long a little over 100 companies are in ope ration.It is highly voiceless as steer 20 companies get 85% of the revenue. According to IMS, a US-establish trade research firm, the retail grocery store place size of it is estimated to be around BDT 84 cardinal as on 2011. Bangladesh pharmaceutical companied steering primarily on branded generic final aspects, mostly using import APIs (Active Pharmaceuticals Ingredi ent). Branded generics are a category of drugs, including prescription products, that are either novel dosage forms of off-patent products begind by a manufacturer that is not the originator of the olecule, or a molecule copy of an off-patent product with a trade name. About 85% of the drugs sold in Bangladesh are generics and 15% are patented drugs †the structure differs importantly from the international merchandise. Branded generic drugs arena about 25% years. The success of the pharmaceutical industry in Bangladesh can be defined by the Porter Diamond Theory. Bangladesh manufactures about 450 generic drugs for 5,ccc registered brands which micturate 8,300 different forms of dosages and strengths.These include a wide plod of products from anti-ulcerates, flour quinol iodins, anti-rheumatic non-steroid drugs, non-narcotic analgesics, antihistamines, and oral anti-diabetic drugs. whatever large firms have also started producing anti-cancer and anti-retroviral drugs. Domestic manufacturers notice for 97% of the drug gross sales in the topical anesthetic market while the stay 3% are merchandise. This is a fatten turnaround over from deuce/ ternary decades back when imports are a have it off turnaround over from deuce/ trinity decades back when imports used to dominate the market.The imported drugs include essential live rescue drugs and other high fiber drugs. The ratio result further increase in favor of the local take as some of the big players are collected to manufacture these high tonus drugs in-house in the future. 1. 7 Overview of the friendship: Beximco Pharmaceutical limited (BPL) is one of the largest pharmaceuticals company in Bangladesh. Beximco Pharma was founded in 1976 and started operations in 1980, manufacturing products under the licenses of Bayer AG of Germany and Upjohn Inc. of USA.It has now handsome to become a leading pharmaceutical company in Bangladesh, and it supplies more than 10% of countrys total medici nal needs. Today Beximco Pharma manufactures and markets its own branded generics for several diseases including AIDS, cancer, asthma, hypertension, and diabetes for both(prenominal) national and international markets. The company owns and wages current pharmaceutical factories mainly in Bangladesh and also has a separate division to operate a modern chemical mill which take a leaks and sells basic chemical products. It also has divisions to produce and sell agro vet and pesticide products.Chapter 2 2. 1 Implementation Of the Theory As we verbalise before we studied our company based on Porter’s diamond which include four internal factors which are- 1. potent Strategy, Structure, and Rivalry 2. Demand conditions 3. Factor Conditions (both basic and advance) 4. connect and Supporting Industries And both outdoor(a) factors which influence the factors mentioned above are- 1. Chance 2. Government 2. 2 Firm Structure, Strategy, and Rivalry Our smear in Bangladesh: In Bangladesh there are currently a total of 245 companies out of which 200 have operations in the country.The market is totally dominated by the local companies and there are only 5 multi-nationals currently operating. The 245 companies’ together have5300 brands registered in Bangladesh. Among this companies BPL is one of the leader with near 8. 4% of the market take. caller-up (BDT m)| trade size of it| Growth in 2011| Market appropriate| | | | 2010| 2011| SPL Pharmaceuticals | 15,725. 8 | 20. 5% | 18. 7% | 19. 2% | Incepta Pharmaceuticals | 7,851. 5 | 28. 6% | 9. 3% | 9. 0% | Beximco Pharmaceuticals | 7,415. 0 | 30. 5% | 8. 8% | 8. 4% | Opsonin Pharma | 4,275. 4 | 27. 2% | 5. 1% | 4. % | Renata | 4,076. 8 | 26. 1% | 4. 9% | 4. 8% | Eskayef Bangladesh | 3,980. 3 | 18. 9% | 4. 7% | 4. 9% | ACI | 3,578. 2 | 24. 9% | 4. 3% | 4. 2% | Acme Pharmaceutical | 3,500. 7 | 13. 7% | 4. 2% | 4. 5% | Aristopharma | 3,412. 8 | 26. 3% | 4. 1% | 4. 0% | Drug International | 3,07 0. 2 | 18. 9% | 3. 7% | 3. 8% | Top 10 Companies | 56,886. 5 | 23. 6% | 67. 7% | 67. 7% | Top 20 Companies | 71,382. 5 | 24. 1% | 84. 9% | 84. 6% | Others Companies | 12,661. 6 | 20. 7% | 15. 1% | 15. 4%| Total Sector| 84,044. 1| 23. 6%| | | Source: World Bank dishearten 1: Major Players In the Market . 2(a) confederation structure: BPL gives highest importance to the principles of unified Governance and its implementation within the organization. In BPL we follow some rules corresponding: 1. every(prenominal) new recruits at BPL undergo a mandatory training on Company’s Code of Conduct. 2. From the very inception, BPL like the other Strategic Business Units (SBU) of the convocation maintains and relates HR policies that are consistent with the perseverance Laws of the country. 3. BPL Pharmaceuticals Ltd leads the Group in encouraging workers’ freedom of association and their right for collective bargaining. . The Company follows laws and encourages a wo rk environment that welcomes transmutation and clean-living treatment in the recruiting offset and the workplace. 5. BPL encourages diversity and represent employment prospect in the recruiting process and the workplace. 6. The Company tracks policies that proactively telephone all forms of discriminations in terms of minority, sexuality and cultural issues. 2. 2(b) Company strategy: For years our company’s strategy is to take hold of the maximum piece done and through client satisfaction by reference product. In words we put our strategies in this way: 1.In BPL we abide by, above all, for top quality wellness burster products at the least address grasp the lowest rungs of the economic fall apart of people in the country. 2. We are get to our shareholders and strive for protection of their capital as well as ensure highest overstep and harvest-feast of their assets. 3. We try hard for ruff stipend to all the employees who constitute the back-à ‚  fig up of the management and operational strength of the Company 4. BPL endeavor for best co-operation of the creditors ; debtors the banks ;financial institutions, the suppliers of afflictive material, the providers of utilities- power, gas ; water and so forth nd the customers 5. BPL fulfills her responsibility to the Government through honorarium of entire purge of collectible taxes, duties, and occupy to various public agencies. 6. We strive, as responsibilities citizen, for a social bless devoid of malpractices, anti-environmental behaviors, wrong and corruptive transmitings. 2. 2. b (1) Long term corporate vision: In order to meet increasing demand in the domestic as well as foreign markets, BPL has undertaken an ambitious expansion broadcast to be completed in two phases. •The head start phase, which is already under way, is expect to be completed by 2012at a total address of BDT 3. gazillion. We anticipate a 25% cost overrun for a final cost of BDT 4. 5 one million million. The first phase is expected to nearly triple the current capacity. •The second phase get out start in 2014, completing in 2017 for a total cost of BDT2. 0 billion (including an estimated cost overrun of 25%). We expect the expansion programs contributing to revenue growth after 2012. We made an supposition that the new workss leave behind operate with an 85% efficiency and after the year of completion, 25% of the capacity will come on line in each of the side by side(p) four years. Second phase will also do the same. 2. 2. b(2) Financial condition:BPL Pharmaceuticals Ltd (BPL) is one of the two Public modified Companies of the Group that is listed at the two acquit exchanges of Bangladesh. And company’s share is considered as ‘Blue Chip’ at both the stock exchanges. BPL Pharmaceuticals is the stand out market leader with a market share of 19. 3%and domestic revenues of BDT 11. 2 billion in the four quarters from April 200 9 to blemish 2010. Because of its dominating presence throughout the country, BPL has enjoyed pissed growth in sales great deal. salute of sales as percentage of sales has also been declining gradually over the year, better gross margin. . 2(c) Domestic Rivals: As we state before BPL Pharmaceuticals stands at number three in terms of market share of 8. 4% and domestic revenues of BDT 8,860. 3 MM in the four quarters from April 2009 to promenade 2010. BPL’s nearest competitors are Incepta Pharmaceuticals and SPL Pharmaceuticals with market shares of 8. 5% and 19. 2% respectively. Incepta and SPL had BDT 4. 9 billion and BDT 11 billion in domestic sales for the be four quarters. Although a number of MNCs are operational in Bangladesh, no MNC is among the top ten in terms of domestic sales.Between two top rivals we consider BPL to be our arch rival though their market share is almost half compared to ours but here we have tried to find out there position in the market . Here’s market study of BPL: If we analyze the interpret market condition of BPL we can understandably see that it is in a nice position. 2. 3 Demand condition In Bangladesh we have wide demand for its products. The demand of local market has helped us to soma a strong customer base and gave us the strength to go for international market. The huge demand of our market direct us to produce large mountain of product.The medicines we are producing now are given(p) holloa: 2. 3(a) Products Category: BPL offers a range of pharmaceutical products (400 types of medicine), which include 1. Tablets 2. Capsules 3. Suppositories 4. Injections 5. Liquids 6. Spray, Drops, Ointment, Cream and grind 7. Oral Dry powders. 8. Dry Powder Inhalers 9. Metered Dose Inhalers 2. 3(b) Types of Customer: By maintaining the quality we set our price conveniently for the locoweed population of Bangladesh. We never compromise about our drugs quality thus we acquire the jab of our custom er. 2. 3(c) Present Market status: anyhow Bangladesh demand of international market drive us to supply our product in these markets • Europe: UK; • Asia: Afghanistan, Bhutan, Cambodia, Hong Kong, Iraq, Macau, Malaysia, Myanmar, Nepal, Papua New Guinea, Sri Lanka, Tajikistan, The Philippines, Vietnam, Yemen; • Africa: Comoros Islands, Eritrea, Gambia, Ghana, Kenya, Libya, Malawi, Mauritania, Mauritius, Mozambique, Niger, Rwanda, Sierra Leone, Somalia, Sudan, Tanzania; • southmost America: Belize, Costa Rica, Guatemala And these are the market under there exploration: • Asia: Iran, Iraq, Kuwait, Laos, Maldives, Mongolia, Qatar, Saudi-Arabian Arabia, Thailand, UAE; Africa: Algeria, Botswana, Central African Republic, Chad, Ethiopia, Ivory Coast, Nigeria, Rwanda, sulphur Africa; • sulfur America: Jamaica, Chili 2. 3(d) CSR activities: Beximco Pharmaceuticals Ltd. is one of the signatory of UN Global Compact in Bangladesh. Our CSR activities helped us to increase our demand. Some examples of our activities are: • BPL mounts global business community to uphold social issues in businessoperations and being convinced of the benefits which will accrue out of voluntaryadherence to universally recognized social values in transaction of businesses. •BPL regularly interacts with the underprivileged instalment of the societydirectly or through different NGOs. • The Company assists the HIV positive/AIDS patients in gaining better access tomedicine through bribe of AIDS medicine to local NGOs. • BPL has donated two ambulances to Pabna Municipal Corporation ; IshwardiMunicipal Corporation for public use. 2. 4 Factors of Endowments: (both basic and advance) 2. 4(a) fundamental factors: Basic factors like natural resources, mood geography demography everything is in our favor in Bangladesh to produce and provide quality health care. . 4 (b) Advance factors condition: In the discussion bellow we tried to call the advance factors condition of our company at present. 2. 4. b. (1) R and D department: Beximco has a strong flex engineering. It has made a cooperative research agreement with Ciba effectiveness Chemicals of Switzerland in proprietary research. In formulation R;D, it focuses principally on ontogenesis new formulations, predominantly through reverse engineering. BPL also focuses on simplifying manufacturing processes and improving cost efficiency.Its growing innovation is evident from self-made launching of a number of new wave products (for example, Oseltamivir capsules for bird ; swine flu treatments, ARVs, anti-cancer products etc. ) groundbreaking formulations like multi-layer tablets, sustained release formulations, dispersible tablets, tender vitamins etc. With considerable experience in MDI formulations, BPL’s R;D team has success to the wide-cut developed a range of CFC-free HFA MDIs. In addition, BPL is also developing a number of APIs to ensure a vailableness of raw materials across the range of healing(predicate) classes.Beximco Pharma has also signed agreements for collaborative research with leading international API manufacturers to settle its API pipeline in order to fully capitalize the WTO patent opportunity. 2. 4. b(2) Human stamping ground: Strategic Human Resource instruction Programs are the energy sources for BPLHR for running towards the notice of success. BPL employs more than 2,400 staff, including over 300 satisfactory professionals such as pharmacists, chemists, microbiologists, engineers, doctors etc. BPL is the third largest pharmaceutical manufacturing company in Bangladesh with net sales of BDT 4. 7 million, according to the 2009 yearly report. We believe in company growth by increasing efficiency train of employees and for that offering ex cellular phoneent environment and complement for skill and knowledge up gradation. Our HR department†ensures the strong supporting lineament to devel op & implement HR policy guidelines for ensuring uninterrupted operation and oral participation to achieve organizational objective as well as fulfilment of employee needs. †maintain an effective way to deal with labor union and bland no unrest has been recorded as dispute. 2. 4. b(3) painful materials:We are proud to say that we are capable of producing raw materials for our own medicines. Some info about our firm’s capability of production is given bellow :(a) API unit: Established in 1992 and mercantile production started in 1995. It is presently the largest quality-bulk drugs manufacturer in the country producing international trite bulk pharmaceuticals to satisfy more than c pharmaceutical companies throughout the country. b) Factory lay outs: BPL Pharmaceuticals has invested in state of the art formulation plants adjust to regulated market standards.Four plants based on the Dhaka site can produce pharmaceutical products to the highest GMP specificati ons. These four plants are: • customary plant (approved by MHRA) • Cephalosporin plant (quality systems align to MHRA requirements, plant being  vigilant for EU regulatory agencies and FDA inspections) • BFS plant (quality systems aligned to MHRA requirements, plant being prepared for EU regulatory agencies and FDA inspections) • Biotech (insulin) plant under locution These plants have been designed by internationally recognized firms and equipped with the best machines that can currently be found on the European and US markets.BPL Pharmaceuticals has also created quality systems and SOPs according to FDA and EU regulatory agencies specifications 2. 4. b(4) dispersal system: It has one of the largest distribution channels in the pharmaceutical industry. The sales force of Beximco, led by a large number of â€Å"medical representatives”, is one of the most aggressive among all local manufacturers. This ensures that BPL’s products always hav e a considerably large outreach. 2. 4. b (5) engineering science: Beximco Pharma has always been a broach in adopting innovative technologies that introduced both mundanity and scale in the business processes.The company’s focus on engine room is intended to take the company to a standard which would match with other top global generic pharma companies. BPL is the groundbreaker company from Bangladesh in introducing technology driven (specialty) products in local and international markets. much(prenominal) specialty products include: †Inhalation aerosols, including Ozone-benign HFA MDIs †Suppositories †bony sprays Beximco Pharma has shown its capability in the prehistoric by installing state-of-the-art MDI plant and IV peregrine plant in collaboration with Pamasol, Switzerland and Pharmaplan, Germany, a sister fear of Fresenius AG, Germany. 2. related and supporting industry: related and supporting industries like Hospitals and health centers healthcar e professionals Insurance and public health bodies sell pharmacies and stores diagnosticcenters etc are available to support our business firm. In 2006 the total number of hospitals in Bangladesh was 1683. Of these 1683 hospitals, 678 were government hospitals and 1005 were non-governmental 2. 6 The condition of two external factors: Chance and Government: BPL have enough chance and government support throughout our company life. The prove of it is the rate of our market share and growth in our country.though we have some restriction from government about the advertising of our medicine in the media but except that we have our governments’ full support where we need it. 2. 7 Overall analysis of the company position based on porter’s diamond: Why Beximco Pharma is doing well ? The solving lies in the Porter’s diamond as we can see from our report the entire element that make a successful industries are there in the market. It has strong supporting industr ies that help us to stay firmly in its feet. It has got all the factors endowment both basic and ripe.It got a study demand and customer base. And last but not the list its strategies structure is strong enough to show out rivals bluntly. Though we know BPL got strong contestation in the market but the maltreat they are moving we know we are strong enough to any resistant threat no matter from where it’s coming from. Factors of Endowments (both basic and advanced) Factors of Endowments (both basic and advanced) Related and Supporting Industries Related and Supporting Industries Demand conditions Demand conditions Firm Strategy, Structure, and Rivalry Firm Strategy, Structure, and RivalryLog Frame: Intervention Logic| objectively verifiable indicators| Source of Verification| Factors of Endowments-Basic Factors-Advanced Factors -communication Distribution System -Skill Labor Human Resource-Research -RnD-Technology| -Availability ofNatural resources, climate geography demo graphy is in favor. It has one of the biggest distribution systems in Bangladesh. 2,400 staff, including over 300 qualified professionals such as pharmacists, chemists, microbiologists, engineers, doctors etc. Oseltamivir capsules for bird ; swine flu treatments, ARVs, anti-cancer products etc. advanced formulations like multi-layer tablets, sustained release formulations, dispersible tablets, chewable vitamins etc. †Inhalation aerosols, including Ozone benign HFA MDIs †Suppositories †rhinal sprays-Installing state-of-the-art MDI plant and IV fluid plant in collaboration with Pamasol, Switzerland and Pharmaplan, Germany, a sister concern of Fresenius AG, Germany. | World Bankyearly Report 2011Annual Report 2011Annual Report 2011Annual Report 2011| Firm Structure, Strategy, and Rivalry-Structure-Strategy-Rivalry| Corporate Governance -mandatory training on Company’s Code of Conduct. BPL like the other Strategic Business Units (SBU-collective bargaining. -divers ity and fair treatment in the recruiting process -diversity and equal employment opportunity-Top quality health care products at the least cost reaching the lowest rungs -Highest return and growth of shareholders assets. -Best compensation to all the employees. -Best co-operation of the creditors ; debtors the banks ;financial institutions. -Supporting the Government through payment of entire range of due taxes, duties, and claim to various public agencies-Rivalry among existing firms is intense. Incepta Pharmaceuticals and SPL Pharmaceuticals with market shares of 8. 5% and 19. 2% respectively. | Annual Report 2011World Bank| Demand Condition| -Huge demand of local market -large volume of product -Range of pharmaceutical products and 400 types of medicine. -Maintaining the quality setting the price conveniently. Exports: Europe: UK;Asia, Africa, South America| World Bank| Related And Supportive Industries| In 2006 the total number of hospitals in Bangladesh was 1683. Of these 1683 hospitals, 678 were government hospitals and 1005 were non-governmental. Wikipedia| Chapter 3 Conclusion: BPL Pharmaceuticals Ltd, as part of a liberal business group, believes that the advancement of good health occurs not only through the innovation, production and distribution of its products, but also through the creation and preservation of a hefty environment. Transparency is a core value of BPL Pharmaceuticals Ltd and other SBUs of the Group and is strictly followed at every step of the business process. BPL Pharmaceuticals hold in has extended her range of services towards the way of global market.We believe the way we are leading towards our goal soon we will be known as one of the top leading pharmaceutical company on the world 3. 2 Recommendations subsequently analyze the whole report we can recommend that †• We have to give more emphasis on the technological support to compete in global market because after 2016 the TRIPS agreement will expire. • Should pursue the government to established export cell to promote export of pharmaceuticals to grab and capitalized the huge export opportunity in LDCs. • R;D activities of the company have to be improved if it wants to compete with global players. observable Law, which is valid up to 2016 for Least real Countries like Bangladesh. After 2016 the advantage enjoyed by Bangladesh will evaporate so to face that condition we have to prepare our selves. • Though we have our own API plant still we have to import the API equipment’s but we should try to produce our own API requirement. 3. 3 References: We used these references to prepare our study: • International Business by Charles W. L. Hill • www. BPLpharma. com. bd • www. beximco †pharma . com .World bank\r\n'