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CHAPTER 01

INTRODUCTION

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1.1 INTRODUCTION

A strategy is a plan of action designed to achieve a specific goal or series of goals

within an organizational framework. Strategic management is the process of building

capabilities that allow a firm to create value for customers, shareholders, and society

while operating in competitive markets. Strategy entails: specifying the organization's

mission, vision, and objectives; developing policies and plans to execute the vision;

and allocating resources to implement those policies and plans. Strategy is largely

about using internal assets to create a value-added proposition. This helps to capture

opportunities in the competitive environment while avoiding threats. Experts in the

field of strategy define the potential components of strategy and the different forms

strategy can take.

Strategies exist at several levels in any organization - ranging from the overall

business (or group of businesses) through to individuals working in it.

Corporate Strategy - is concerned with the overall purpose and scope of the business

to meet stakeholder expectations. This is a crucial level since it is heavily influenced

by investors in the business and acts to guide strategic decision-making throughout the

business. Corporate strategy is often stated explicitly in a "mission statement".

Business Unit Strategy - is concerned more with how a business competes

successfully in a particular market. It concerns strategic decisions about choice of

products, meeting needs of customers, gaining advantage over competitors, exploiting

or creating new opportunities etc.

Functional Strategy - is concerned with how each part of the business is organized to

deliver the corporate and business-unit level strategic direction. Operational strategy

therefore focuses on issues of resources, processes, people etc.

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1.2 OBJECTIVES OF THE STUDY

My broad objective is to know the pharmaceutical companies different strategies at

different level of their business. How the companies applied in their business. Then I

have tried to compare among the strategies that the companies have undertaken to

succeed in the business.

1.3 METHODOLOGY OF THE STUDY

The prime source for the term paper content is the annual report of the respective

companies. Then I search the internet to find more contents related to this topic. I also

took the help of our two authorized book for the course which are Strategic

Management: An Integrated Approach by Charles W. L. Hill & Gareth R. Jones and

Strategic Management: Concept & Cases by Arther A. Thompson Jr. & A.J

Strickland.

1.4 LIMITATION OF THE STUDY

One of the main limitations of this term paper is that the only source available for

collecting data is the annual report of the respective companies and their websites.

There was not enough time available for fixing a meeting with the company

representatives.

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CHAPTER 02

AN ANALYSIS OF

PHARMACEUTICAL

INDUSTRIES

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2.1 PHARMACEUTICAL INDUSTRY

Pharmaceutical industry is the industry which develops, produces, and markets drugs

or pharmaceuticals licensed for use as medications. Pharmaceutical companies are

allowed to deal in generic or brand medications and medical devices. They are subject

to a variety of laws and regulations regarding the patenting, testing and ensuring

safety and efficacy and marketing of drugs. The pharmaceutical industry is

responsible for the development, production and marketing of medications. Thus, its

immense importance as a global sector is evident. The total level of pharmaceutical

revenue worldwide had reached nearly one trillion U.S. dollars. North America is

responsible for the largest portion, generating more than 40 percent of these revenues.

This is mostly due to the leading role of the U.S. pharmaceutical industry. But as in

many other industries, the Chinese pharmaceutical sector shows the highest growth

rates worldwide.

Pharmaceutical Industry has grown in Bangladesh in the last two decades at a

considerable rate. The sector consistently creates job opportunities for qualified

people. In Bangladesh Pharmaceutical sector is one of the most developed hi tech

sector which is contributing in the country's economy. The professional knowledge,

thoughts and innovative ideas of the pharmacists working in this sector are the key

factors for these developments. Due to recent development of this sector we are

exporting medicines to global market including European market. This sector is also

providing 95% of the total medicine requirement of the local market. Leading

Pharmaceutical Companies are expanding their business with the aim to expand

export market.

For preparing this term paper I have chosen GlaxoSmithKline & Novartis from

the foreign market while Incepta Pharmaceuticals Limited and The ACME

Laboratories Limited from the local market. I have tried to analyze their different

strategies followed by them and finally tried to compare among the strategies followed

by those companies.

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2.2 GlaxoSmithKline

GlaxoSmithKline (GSK) is a worlds leading research-based pharmaceutical

company, along with in the area of Health care with a powerful combination of skills

and resources that provides a platform for delivering strong growth in todays rapidly

changing healthcare environment. GlaxoSmithKline A subsidiary of GlaxoSmithKline

(GSK) is one of the worlds largest research based pharmaceutical and healthcare

companies GSK, continues to be committed to improving the quality of human life by

enabling people to do more, feel better and live longer.

Henry Wellcome and Silas Burroughs founded Glaxo in 1880. Glaxo established

medicine research centre around the world. In the Thirties, GSK introduced improved

technology to the business. The business grew and new ventures were bought in UK.

Glaxo Wellcome and SmithKline Beecham announced their intention to merge on 17

January 2000. The merger was completed in December that year, forming

GlaxoSmithKline (GSK). Companies were competing for the same raw materials,

both were involved in large-scale marketing of medicine produce and both used

similar distribution channels. Between them, they had operations in over 76 countries.

2.2.1 FUNCTIONAL LEVEL STRATEGY

GSK lays down its strategies with the intention of being the Indisputable leader in the

pharmaceutical sector. Indisputable in the sense of quality of the product, price,

selling and distribution network, more precisely in every sphere of its activities.

GSK have been creating a more balanced business and product portfolio, capable of

delivering sustainable sales growth. This is centered on our three business areas of

Pharmaceuticals, Vaccines and Consumer Healthcare.

GSK have changed their R&D organization so that it is better able to sustain a

pipeline of products that offer valuable improvements in treatment for patients and

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healthcare providers. This is underpinned by a focus on improving productivity and

rates of return in R&D.

As their business continues to change shape, we are transforming how we operate so

that we can reduce complexity and become more efficient. This frees up resources to

reinvest elsewhere in the business.

Being a responsible business is central to their strategy, and how we deliver success is

just as important as what we achieve. Ensuring our values are embedded in our culture

and decision-making helps they better meet the expectations of society.

2.2.2 BUSINESS LEVEL STRATEGY

GSKs business goal is to be a world leader in pharmaceutical industry. In order to

achieve this, the company seeks to improve its R&D pipeline, using a focused drug

portfolio strategy and selective in-licensing agreements for the external contracting of

R&D. The company links R&D closely to commercial operations to maximize the

value of its R&D portfolio.

GlaxoSmithKline (GSK) is one of the worlds largest research-based pharmaceutical

companies that that discovers, develops, manufactures and markets human health

products. It is an innovative company that produces branded products only, which it

has developed itself.

The company has two main divisions, pharmaceuticals and consumer healthcare. The

pharmaceuticals division is the largest part of GSKs businesses and can be divided

into prescription drugs and vaccines. This report deals with the pharmaceuticals

division only. The headquarters of GSK are located in the UK, with additional

operational headquarters in the USA. The company operates in some 160 national

markets, the major ones being the USA, Japan, France, Germany, the UK and Italy.

GSK conducts R&D at more than 20 sites and employs 15,000 employees in R&D.

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The company has a leading position in genetics and in new drug discovery

technologies. The manufacture and supply system of GSK operates as a single global

network.

2.2.3 CORPORATE LEVEL STRATEGY

GlaxoSmithKline marketing strategy is directly linked to its corporate strategy. The

following points illustrate GlaxoSmithKline official strategic priorities as mentioned

in company website and corresponding points in marketing strategy of the company:

Growing diversified global businesses: In other words, GlaxoSmithKline product

differentiation and market expansion plays an integral role within the corporate

strategy. This specific corporate strategy finds its echo within

GlaxoSmithKline strategic marketing through positioning the company as the largest

drug manufacturer with the widest ranges of products in emerging markets such as

China, Turkey and India.

Delivering more valuable product of: This strategy can interpret as an effective

combination of quality and price for GlaxoSmithKline products. This strategy has

been linked to GlaxoSmithKline marketing strategy through communicating the

massage about effective combination of quality and price for

GlaxoSmithKline products with the use of various marketing communication channels

in an integrated manner.

Simplifying the companys operational model: To be constantly aiming for high

level of efficiency in various organizational processes. GlaxoSmithKlines reliance on

digital marketing for a range of products such as Oral Care due to the high level of

efficiency of this marketing platform highlights the link between the companys

strategic marketing and corporate strategy.

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2.3 NOVARTIS PHARMACEUTICALS

Novartis pharmaceutical is a global pharmaceutical company committed to making

medicines to treat some of the worlds most challenging diseases. Its goal is simple:

make sure that people facing disease and illness get the therapies they need, when they

need them. Novartis was created in 1996 through the merger of Ciba-Geigy and

Sandoz, two companies with a rich and diverse corporate history. Throughout the

years, Novartis and its predecessor companies have discovered and developed many

innovative products for patients and consumers worldwide. Their mission is to care

and cure. They want to discover, develop and successfully market innovative products

to prevent and cure diseases, to ease suffering and to enhance the quality of life.

Novartis has five business segments and is supported by its global research

organization, the Novartis Institutes for Biomedical Research (NIBR). These segments

are strategically aligned to bring innovative, high-quality and affordable medicines

and therapies to patients around the world.


Novartis is uniquely positioned to take advantage of the fast-changing industry

environment and to fulfill its mission of caring and curing. As it enters their next

growth phase, they are accelerating the execution of their strategy of leading through

science-based innovation to deliver positive health outcomes for patients and payers.

Their strategic priorities are to extend their lead in innovation, accelerate growth and

drive productivity across our diversified portfolio in order to generate profits and

increase shareholder return. Committed to high performance with integrity, we are

engaged in an open and cooperative dialogue with all of our stakeholders.

Extending lead in innovation: Science-based innovation is at the heart of Novartis.

They follow a distinct research and clinical approach to build an industry-leading

pipeline of differentiated medicines and treatments with the goal of delivering real-

world benefits to patients and healthcare providers.

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Accelerating growth: Novartis is pursuing long-term growth by maximizing product

launches and leveraging its robust portfolio. They are expanding in established and

emerging markets and adapting our commercial model to the rapidly changing

healthcare environment.

Driving productivity: Novartis is driving productivity by simplifying its processes,

accelerating cross-divisional collaboration, and improving global procurement and

supply chain management. They are using rigorous resource allocation to improve

cash management and profitability.


Novartis pharmaceuticals business strategy is a unique one. They are always ready to

fulfill the customer demands and they are able to please the customer group with

sensible prices. With these they try to achieve the distinctive competencies.

Novartis has been trying a very different strategy. Instead of targeting giant

populations, it targets rare diseases with a small, very similar population. That lets

scientists figure out the molecular pathway by which the disease works and how to

interrupt it.

Market Penetration: Novartis will grow markets by penetrating markets in which

similar products already exist, but their goal is to gain competitors customers and

their market share. They will also try to convince the current non-users of our

products to buy our products by using smart advertising and loyalty programs.

Market Coverage: The market coverage is differentiated in their case because they

offer different products for different target groups. However, all of thei products will

be available simultaneously in all of the selling points: Pharmacies, Supermarkets and

Hospital drugstores.

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Novartis itself created from merging two companies. Novartis strategy is based on

focused diversification. Their uniquely broad business portfolio focuses on science-

based healthcare sectors that are growing, reward innovation and enhance the lives of

patients. Innovation is fundamental to our business. In 2012, we invested $9.1 billion

(USD) across our divisions in R&D and we plan to sustain our high level of

investment.

Novartis is consistently rated as having one of the industrys most respected

pharmaceutical development pipelines with 141 projects in pharmaceutical clinical

development.

The Swiss giant Novartis aims to transform itself from a pharmaceutical company to

become a broader-based health care company over the next five to ten years. To do

this it has been strengthening its core competence of science-based innovation while

focusing on five high-growth segments of healthcare: Pharmaceuticals, eye care,

generics, consumer health and vaccines and diagnostics.

2.4 INCEPTA PHARMACEUTICALS LIMITED

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 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 company.

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The companys vision is to become a research based global pharmaceutical company

in addition to being a highly efficient generic manufacturer. It 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.


Incepta Limited is committed about maintaining salaries and benefits that are fair to

all employees and competitive in the local market place. The management monitors

changes in the economy and salary market to ensure that the overall compensation

package is sufficient to attract, recruit and retain high quality staff within the financial

capabilities of Incepta Limited.

Incepta has taken the following strategy for reduce the production cost. These are:

Sourcing better quality of raw material at the lower cost

Take initiative to enhancing productivity

Take initiative to minimize production process losses

Take initiative to minimize wastage of finished product

Incepta has taken the following strategy to reduce the distribution cost. These are

Develop smart distribution system

Give training to distribution assistant to be more efficient.

Update sales territory periodically.

Use of fuel efficient vehicle to reduce the distribution cost.

Take initiative to reduce the inventory cost.

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Incepta follows the integrated cost leadership/differentiation strategy. Because

Incepta makes the various types of strategy for its each and every department. The

departments are as follows:

Human Resources Department

Finance & Accounts Department

Information Technology department

Marketing Strategy department

Production department

Supply Chain management department

Administration department

Quality Assurance department

Research and development department

Engineering department

Technical services department

Quality Control department

Incepta practice the following strategy to support the other department for smooth

operation. These are

Implement new technology instead of legacy system

Take initiative cost reduction program to reduce the IT cost

Incepta practice the following strategy to increase the sales in terms of taka and

product quantity. These are

Take initiative to develop loyal customer

Product diversification to enhance product basket.

Give training to enhance selling and communication skill

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A complete and integrated Marketing, Sales and Distribution network is required to

make the information on products and services available to the customer. To achieve

the purpose and mission, they affirm their values of integrity, respect for people,

innovation, performance and leadership. All the skilled and professional personnel are

set at their very appropriate responsible positions. 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.

Incepta has its own large distribution network having 20 depots all over the country.

They make the products available in every single drug store of the country. The depots

are located in Dhaka, Chittagong, Rajshahi, Khulna, Sylhet, Barisal, Comilla,

Noakhali, Mymensingh, Magura, Bogra, Narayangonj, Rangpur, Dinajpur, Tangail,

Jessor, Moulovibazar, Cox's Bazar and Feni.

2.5 THE ACME LABORATORIES LIMITED

The ACME laboratories limited is the famous pharmaceutical company in Bangladesh

and it has been continuously in the 2nd position among all national and multinational

companies. Since its inception in 1954, has been working relentlessly with a vision to

ensure Health, Vigor and Happiness for all and is on a perpetual quest for excellence.

ACMEs quality slogan is "Perpetual Quest for Excellence". The ACME Laboratories

Ltd. is committed to maintain state-of-the-art manufacturing facilities for ensuring

best quality products to the customers. The Company is devoted to increase sales

growth, increase productivity, increase profit margin, improve company image &

customer satisfaction and ensure continual improvement. ACME continuously seeks

to expand its production facilities, add employees, and increase its sales and marketing

efforts. According to the latest statistics, ACME is one of the leading pharmaceutical

companies out of more than 300 registered pharmaceutical companies in the country.

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ACME has also endeavored to strengthen its network of international marketing

operations to export its products abroad. Over the years, the efforts made by the

competent staff coupled with customer confidence has fuelled our growth, prompting

ACME to overcome hindrances and progress towards its ultimate goal i.e., attaining

success which indeed is what literally ACME stands for. We are optimistic about our

perpetual growth and success.


The functional departments take the responsibility to implement and achieve their

objectives. Each department helps to formulate strategy for the business. The

functional department knows the areas to be developed and achieve the company

objectives. The company has diversified business and is responsible for formulating

and implementing the strategy for each business. Coordination and consistency among

the various functional and process strategies are helping the company to achieve its

objectives.

Pursuing ways to realize economies of scale:

Moves to achieve continuous reduction of total cycle time in production

process. Square is implementing flexible manufacturing systems and doing

batch processing to minimize costs.

Finding ways to enrich human capital and develop fully efficient and

productive workforce by necessary training and good recruitment process

Continuous involvement in introducing newer molecules to market and new

distribution systems to meet the needs of the future.

Moves to empower all Square employees in a participative, cooperative and

creative workplace. Any new idea of product marketing and sales is instantly

rewarded.

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The ACME laboratories Limiteds strategic managers current business strategy is

mostly to peruse ways to increase product line and breadth, focus on specific market

segment, strengthen distinctive competency by achieving superior quality and increase

geographic coverage.

The operating strategy of the company is to implement the actions effectively &

efficiently. They are:

Moves to implement JIT inventory management system. This will

reduce s fixed overhead cost.

Finding more sources of quality raw materials inputs. is also looking at

the local suppliers for this purpose.

Developing and inventory stocking strategy to a limited extent to meet

any unanticipated demand.

Instituting proper warehouse staffing strategy by proving proper training

and support system so that any order can be fulfilled accurately within

shortest period of time.


The ACME laboratories have an unique strategy to maintain the corporate works.

These are:

Making the moves to establish positions in different businesses and achieve

related or unrelated diversification.

Pursuing ways to capture valuable cross-business strategic fits and turn them

into competitive advantage.

To take the initiative and act accordingly to boost overall performance of the

company.

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Venture new business to utilize resources and reduce risk.

Establishing investment priorities and steering corporate resources into the

most attractive business units.

Achieve business objectives through quality and customer acceptance by

providing quality & effective drugs

Providing uncompromising quality strategy all over the business units to

achieve and maintain corporate key beliefs and goals and to comply with

regulatory requirements and have ethical practices.

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CHAPTER 03

COMPARISON

&

CONCLUSION

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3.1 COMPARISION

Strategic planning involves making decisions and taking actions that help organization

to achieve goals. Strategic management involves setting the overall goals, values and

direction of the organization. Ideally, planning and management align to move an

organization forward. Comparing and contrasting an organizations strategic plan with

a management strategy can improve resourcefulness and efficiency that leads to

successfully achieving organizational goals.

Here I have already analyzed the different strategies taken by the selected company

which lies in the pharmaceuticals industry. Now I am going to compare among them

in a systematic manner:

Functional Level Comparison:

GSK have been creating a more balanced business and product portfolio, capable of

delivering sustainable sales growth. GSK have changed their R&D organization so

that it is better able to sustain a pipeline of products that offer valuable improvements

in treatment for patients and healthcare providers. As their business continues to

change shape, we are transforming how we operate so that we can reduce complexity

and become more efficient.

On the other hand Novartis has introduced science based innovation to deliver positive

health outcomes for patients and payers. Their strategic priorities are to extend their

lead in innovation, accelerate growth and drive productivity across our diversified

portfolio in order to generate profits and increase shareholder return. Committed to

high performance with integrity, we are engaged in an open and cooperative dialogue

with all of our stakeholders.

Incepta Limited is committed about maintaining salaries and benefits that are fair to

all employees and competitive in the local market place. Incepta has taken some

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unique strategy for reduce the production cost. Incepta has taken some strategy to

reduce the distribution cost.

The ACME laboratories limited have functional departments to take the responsibility

to implement and achieve their objectives. Each department helps to formulate

strategy for the business. The functional department knows the areas to be developed

and achieve the company objectives. The company has diversified business and is

responsible for formulating and implementing the strategy for each business.

Coordination and consistency among the various functional and process strategies are

helping the company to achieve its objectives.

Business Level comparison:

GSKs business goal is to be a world leader in pharmaceutical industry.

GlaxoSmithKline (GSK) is one of the worlds largest research-based pharmaceutical

companies that that discovers, develops, manufactures and markets human health

products. The pharmaceuticals division is the largest part of GSKs businesses and can

be divided into prescription drugs and vaccines. The manufacture and supply system

of GSK operates as a single global network.

On the other hand Novartis are always ready to fulfill the customer demands and they

are able to please the customer group with sensible prices. With these they try to

achieve the distinctive competencies. Instead of targeting giant populations, it targets

rare diseases with a small, very similar population.

Incepta follows the integrated cost leadership/differentiation strategy. Because

Incepta makes the various types of strategy for its each and every department. Incepta

practice some unique strategy to support the other department for smooth operation.

The ACME laboratories operating strategy of the company is to implement the

actions effectively & efficiently. Moves to implement JIT inventory management

system. This will reduce s fixed overhead cost. Finding more sources of quality raw

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materials inputs. is also looking at the local suppliers for this purpose. Developing

and inventory stocking strategy to a limited extent to meet any unanticipated demand.

Instituting proper warehouse staffing strategy by proving proper training and support

system so that any order can be fulfilled accurately within shortest period of time.

Corporate level comparison:

GlaxoSmithKline marketing strategy is directly linked to its corporate strategy.

Growing diversified global businesses, Delivering more products of value and

Simplifying the companys operational model are main aim from their corporate level.

Novartis itself created from merging two companies. Novartis strategy is based on

focused diversification. Their uniquely broad business portfolio focuses on science-

based healthcare sectors that are growing, reward innovation and enhance the lives of

patients. Innovation is fundamental to our business.

Incepta has its own large distribution network having 20 depots all over the country.

They make the products available in every single drug store of the country. 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.

In ACME, making the moves to establish positions in different businesses and achieve

related or unrelated diversification. Pursuing ways to capture valuable cross-business

strategic fits and turn them into competitive advantage. Venture new business to

utilize resources and reduce risk. Establishing investment priorities and steering

corporate resources into the most attractive business units.

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3.2 CONCLUSION

Apart from their own business, in our daily life pharmaceutical companies have a

huge effect. In any kind of diseases we need medicines, and these are companies

which supply those medicines.

All the four companies form the pharmaceutical industry that I have chosen are very

top class companies and they are the market leaders in considering the others. It is not

easy to compare among the strategies that those companies have undertaken as all the

four are successful in their own field.

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REFERENCES

www.gsk.com

http://www.novartis.com/

http://www.inceptapharma.com/

http://acmeglobal.com/acme_laboratories.htm

Annual Report Of GlaxoSmithKline

Annual Report Of Novartis

Annual Report Of ACME Laboratories

Annual Report Of Incepta Pharmaceuticals

Strategic Management : An Integrated Approach by Gareth R. jones & Charles

W. L. Hill

Strategic Management : Concept & Cases by Thompson

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