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Pharmaceutical industry is one of the largest industries in our country. Every year a huge amount foreign currency comes from this sector. Square Pharmaceuticals Ltd., the flagship company, is holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985 and is now on its way to becoming a high performance global player. It was established in 1958 and converted into a public limited company in 1991. The sales turnover of SPL was more than Taka 5 Billion (US$ 90 million) with about 15% market share (April 2003 March 2004) having a growth rate of about 16%. Besides fulfilling domestic demand it exports a huge amount of drugs in abroad. It is now exporting medicine in 20 countries. It has achieved the trust of the domestic and foreign people. SQUAREs Mission is to produce and provide quality &innovative healthcare relief for people, maintain stringently ethical standard in business operation also ensuring benefit to the shareholders, stakeholders and the society at large. As a very large and formal company Square uses different management practices in their corporate world. It does the works of planning, organizing, leading and controlling. Square Pharmaceuticals Ltd. follows a systemic way to take a particular decision. Based on the present & previous available data and information the decision is made, focusing & predicting the future consequences. The Planning mechanism of Square involves focusing on the goal and developing the overall strategy for achieving the goal. Strategy involves long term decision making to get a long term benefit. We did SOWT analysis of the Square. Square Pharmaceuticals Ltd. has many things to its credit as strengths while like any other company in the same industry has some weakness. Square is always abreast of the market trend and proactive to adopt any market changes and explore opportunities. Square divides works to be done into specific jobs and departments, assign tasks and responsibilities associated with individual jobs, coordinate diverse organizational tasks, 11 clusters jobs into units, establish relationship, formal lines authority, allocates and deploys organizational resources. Human Resource department plays an important role to develop the most efficient manpower for the Square. Skilled, efficient, dynamic manpower is one of the most desirable features of this organization. Every organization takes different initiatives so that the employees can perform their jobs efficiently and effectively. Organizations motivate its employees and influence them so that they can do their best working in full swing. Leadership is the process of influencing a group toward the achievement of goals. As a successful company, Square Pharmaceuticals Ltd. practices leadership in its organization for moving the whole organization towards its goals. As controlling is a continuous process, Square follows a three step process for controlling: measuring actual performance, comparing actual performance against a standard, and taking managerial action to correct deviations or inadequate standards.

3.2 Market Expansion Strategy of SPL MARKETING MIX Before going into deeper, we should define the present marketing mix of SPL which is figured out in the following model: a) Market Segments: The main basis of segmenting market in Bangladesh is therapeutic drug i.e. NASAL DROPS, ANTIBIOTIC etc. Presently SPL has the largest product portfolio to serve as many segments as possible. It consistently strives to make it larger. Its present segments are identified in the product table. b) Target Customers: Rather than the consumer of the medicine, the key customers for SPL have been the physician. Physicians are considered here as opinion leader. The major innovative drugs can not be purchased without a prescription provided by a doctor. SPLs main selling task has been directed therefore, not at the user, but at physicians. Doctors and physicians are segmented on the basis of its therapeutic drug segment. As for example, NASAL DROPS products are communicated at E.N.T specialists. Therefore, if SPL has NASAL DROPS product line, then E.N.T specialists are treated its target customers. Besides this, general physicians are also its target customers. Product (Medicine) Price (All most regulated) Promotion (Personal Selling through relationship) Place (Domestic & foreign) Target Customer (Doctors & Physicians) 10 c) Value Proposition: SPL has presently been offering its products to its market segment with the value proposition Utmost quality, excellent efficacy. d) Product: SPL develops, produces, and markets drugs of different therapeutic groups licensed for use

as medications. The Bangladeshi Pharmaceutical Market is primarily a generic market producing both patented and off-patented products. This is popularly known as Branded Generic Market since any manufacturer can produce the same molecule (either patented or off-patented) and market it in different brand names. SPL is not beyond this scenario. It produces offpatented molecule and market it in its own brand. The product list according to generic segment can be found in appendix part. e) Price: Drug pricing is heavily dependent on the National Drug Policy adopted by directorate of Drug Administration of Bangladesh Govt. agencies act as a countervailing power in pricing pharmaceuticals. As per the NDA 2005, regulatory authority pursuing Rational pricing of drugs to ensure essential drugs available to the end-users at affordable prices. On the basis of that policy, SPL has been pursuing two different kinds of pricing policya. For OTC product, all most similar price as the competitors b. For POM product, competitive pricing. There are also few exceptions. If SPL introduces a product first in the market, it charges little bit higher price than its competitors, but within the rules and regulations of Drug Administration. f) Place: SPL has the strongest domestic distribution network for smoothing distribution of medicines to all parts of the country. Currently it has 15 depots all over the country. Those are situated at Dhaka, Pabna, Bogra, Rangpur, Khulna, Barisal, Comilla, Mymensingh, Chittagong, Noakhali, Sylhet, Tangail, Rajshahi, Faridpur and Naryanganj. It uses own transport system to deliver its product to the stockist and retailer. 11 SPL also exports its products to 31 countries: Present export market covers Myanmar Papua New Guinea Comoros Island Bhutan Tanzania Nepal Gambia Niger Tajikistan Afghanistan Mauritius Sierra Leone Macau countries Rwanda Libya Malawi Kosovo Kenya Iraq Sri Lanka Somalia Yemen Cambodia Ukraine Uzbekistan Vietnam Mozambique Benin Botswana Ghana g) Promotion:

Public advertisement for medicine, especially POM drug is strictly prohibited in Bangladesh. But it may be done for OTC medicine to some extent. However, no pharmacy company in Bangladesh is engaged in such advertisement. SPL heavily depends on personal selling through rapport building and maintaining. A team of sales representatives, called MPC have been employed to meet with physicians to explain the merits, demerits, indication, contraindications, etc. of the medicine with the help of literature, brochure, pad, booklet, leaflet, gift item etc. That is, the Medical Promotion Officers promote the companies product to doctors front with the help of different promotional materials. If a new drug is to be more expensive, then it needs to demonstrate that its superior performance is worth it. 3.3 Marketing Problems of SPL After analyzing its present market expansion strategies the following problems have been found in it: 1) It seems that SPL pursuing prescription for profit strategy for market penetration. It is partially good, but may not be perfect as the completion is very hard. There are some other parties who have the scope and ability to act as opinion leader and to motivate the buyer. These potential opinion leaders are remaining unexploited. SPL has enough resources to let them add value to the company. 2) I didnt find SPL adopting any strategy to create brand loyalty. But client is more profitable than customer in terms of both transaction as well as positive word-of-mouth 12 communication. He himself can be an opinion leader. 3) At present, SPL gets only 20% raw materials from its API plant and the rest are to be imported. It increases product cost. 4) Market should not be segmented only on the therapeutic drug basis. 5) Holding the heaviest product portfolio should not be the ultimate goal at all. Emphasis must be given on how early a new product can be launched in the market place than the competitor. 3.4 PRESENT MARKET POSITION 3.5 FINANCIAL RESULTS [The operating financial results of the Company for the year 2008-2009 as compared to prev ious year are summarized hereunder: PRESENT FINANCIAL POSITION Capital Resources ASSETS 31-03-2009 31-03-2008 Non-Current Assets: 8,291,290,984 6,804,429,292

Property, Plant and Equipment-Carrying Value 4,008,432,171 3,531,003,509 Capital Work-in-Process 591,114,649 481,239,419 Investment Long term(at cost) 3,611,744,164 2,792,186,364 Current Assets: 4,411,836,436 3,682,510,712 Inventories 2,026,736,322 1,544,191,798 Trade Debtors 360,245,646 322,864,637 Advances, Deposits & Repayments 288,806,440 236,455,395 Investment in Marketable Securities(at cost) 20,250,000 20,250,000 Short Term Loan 1,510,502,334 1,418,893,703 Cash & Cash Equivalents 205,295,694 139,855,179 Total Assets 12,703,127,420 10,486,940,004 BUSINESS PORTFOLIO Subsidiary Operation Long-term investment Investment In Marketable Securities Square Spinning Ltd. Square Textiles Ltd. Shares Pioneer Insurance Company Square Cephalosporins Ltd. United Hospital Ltd. Square Biotechs Ltd. National Housing Finance and Investment Ltd. Central Depository Bangladesh Ltd. Square Hospitals Ltd. Square Knit Fabrics Ltd. Square Fashions Ltd. Square Informatics Ltd. BALANCE SHEET As at 31 March 2009 31-03-09 31-03-08 ASSETS: Non-Current Assets: 9,407,730,001 8,291,290,984 Property, Plant and Equipment-Carrying Value 4,899,679,832 4,088,432,171 Capital Work-in-Progress --- 591,114,649 Investment - Long Term (at Cost) 4,508,050,169 3,611,744,164 Current Assets: 3,843,512,855 4,411,836,436 Inventories 2,098,755,231 2,026,736,322 Trade Debtors 477,562,002 360,245,646 Advances, Deposits and Prepayments 260,330,162 288,806,440 Investment in Marketable Securities (at Cost) 20,250,000 20,250,000 Short Term Loan 693,157,720 1,510,502,334

Cash and Cash Equivalents 293,457,740 205,295,694 TOTAL ASSETS (TK.) 13,251,242,856 12,703,127,420 SHAREHOLDERS' EQUITY AND LIABILITIES: Shareholders' Equity: 9,949,397,634 8,417,040,705 Share Capital 1,207,224,000 894,240,000 Share Premium 2,035,465,000 2,035,465,000 General Reserve 105,878,200 105,878,200 15 Tax Holiday Reserve 1,101,935,237 1,101,935,237 Retained Earnings 5,498,895,197 4,279,522,268 Non-Current Liabilities: 660,976,668 785,241,612 Long Term Loans Secured 449,757,608 602,584,615 Deferred Tax Liability 211,219,060 182,656,997 Current Liabilities: 2,640,868,554 3,500,845,103 Short Term Bank Loans 1,534,345,782 2,669,693,184 Long Term Loans - Current Portion 295,590,601 297,002,646 Trade Creditors 124,222,699 100,953,258 Liabilities for Expenses 69,573,702 32,290,235 Liabilities for Other Finance 617,135,770 400,905,780 TOTAL SHAREHOLDERS EQUITY AND LIABILITIES1 3(T,2k5) 1,242,856 12,703,127,420 INCOME STATEMENT For the Year Ended 31 March 2009 2008-2009 2007-2008 GROSS TURNOVER 11,363,597,928 9,565,715,902 Less: Value Added Tax 1,545,801,360 1,307,872,163 ____________ ____________ NET TURNOVER 9,820,796,568 8,257,843,739 COST OF GOODS SOLD (5,672,565,973) (4,856,061,933) _____________ ____________ GROSS PROFIT 4,148,230,595 3,401,781,806 Operating Expenses: (1,779,793,368) (1,692,475,988) Selling and Distribution Expenses (1,319,362,317) (1,220,979,268) Administrative Expenses (460,431,051) (471,496,720) PROFIT FROM OPERATIONS 2,368,437,227 1,709,305,818 Other Income 665,520,915 604,628,504 Financial Expenses (397,135,963) (351,868,423) NET PROFIT BEFORE WPPF 2,636,822,179 1,962,065,899 Allocation for WPPF (125,562,961) (93,431,709) NET PROFIT BEFORE TAX 2,511,259,218 1,868,634,190 Provision for Income Tax (592,644,226) (409,660,827) Provision for Deferred Income Tax (28,562,063) (77,110,270) NET PROFIT AFTER TAX (TK) 1,890,052,929 1,381,863,093 (Transferred to the Statement of Changes in Equity) Earnings per Share (EP S(T) K) 156.56 114.47

CASH FLOW STATEMENT For the Year Ended 31 March 2009 2008-2009 2007-2008 Cash Flows from Operating Activities: RECEIPTS: Collection from Sale s 9,706,402,257 8,231,097,52 5 Others 466,326,850 449,727,661 10,172,729,107 8,680,825,186 PAYMENTS: Purchase of Raw and Packing Materials 4,595,248,761 4,434,614,344 Manufacturing and Operating Expenses 2,152,581,352 2,075,086,488 Bank Interest 397,135,963 351,868,423 Income Tax 475,997,448 458,227,366 Workers Profit Participation Fund 60,192,228 58,051,027 Others 7,684,822,669 7,379,996,482 Net cash provided by operating activities 2,487,906,438 1,300,828,704 Cash Flows from Investing Activities: Purchase of Fixed Assets (877,960,724) (1,106,201,471) Disposal of Fixed Assets 8,806,250 8,985,055 Investment in Square Hospitals Ltd. (500,000,000) (500,000,000) Investment in National Housing Finance & Investment Ltd. ---- (3,157,800) Investment in Square Biotechs Ltd. (150,000,000) (316,400,000) Investment in Square Multi Fabrics Ltd. (249,500 , 0 0 0 ) ---Capital Work-in-Progress ---- (109,875,230) Sale of Marketable Securities 67,289,225 ---Interest Received 89,551,011 112,595,980 Dividend Received 42,007,687 40,197,168 Net cash used in investing activities (1,569,806,551) (1,873,856,298) Cash Flows from Financing Activities: Long Term Loan Received 151,162,607 414,288,000 Long Term Loan Repaid (305,401,660) (237,046,566) Short Term Bank Loan Increase/Decrease (1,135,347,402) 850,915,306 Short Term Loan Increase/Decrease 817,344,614 (91,608,631) Dividend Paid (357,696,000) (298,080,000) Net cash (used)/provided by financing activities (829,937,841) 638,468,109 Increase in Cash and Cash Equivalents 88,162,046 65,440,515 Cash and Cash Equivalents at the Openi n g 205,295,694 139,855,179 Cash and Cash Equivalents at the Closing (TK) 2 9 3 , 457,740 2 05,295,694 SWOT ANALYSIS The SWOT Analysis comprises of the organizations internal strengths, weaknesses, external opportunities, and others. SWOT analysis is an important tool for evaluating the companys strengths, weaknesses, opportunities, and others. It gives an organization an insight of what they can do in future and how they can compete with their existing competitors. This tool is very important to identify the current position and performance of the organization relative to others, who are playing in the same field and used in the strategic analysis of the organization.

SWOT ANALYSIS STRENGTHS WEAKNESSES OPPORTUNITIES THREATS 4.1 STRENGTHS: Square is the largest private sector industrial conglomerate in Bangladesh. Square is more efficient and leading company in pharmaceutical industry for their strengths. Their strengths are given below: The well qualified employees are strength of Square. Huge experience in the pharmaceutical market Used modern and sophisticated technology Strong research and development division Highly Skilled workforce, efficient management Strong brand recognition, outstanding service Price of Cephalosporin is very competitive World class manufacturing facilities. 4.2 WEAKNESSES: The chain of command of Square is elongated, which takes long time to take any decision. In reality Square has insignificant weakness in strategy Need more smooth distribution channel Less prescription share compared to the competitors. ,t Ineffective and inefficient detailing of FPs In case of product launching Square is follower rather than to become pioneer. Some of the Cephalosporins are showing negative growth 4.3 OPPORTUNITIES: The pharmaceutical market of Bangladesh is booming rapidly, so Square has a huge scope to do better. Today technology is more advanced and sophisticated which opens the door of the new generation of medicine. More and more health care centers and hospital are being established Square has scope to penetrate in those. Globalization opens the door of new era for Square. Established & Growing market segment. Can be penetrated easily in the market 4.4 THREATS: There are lots of big pharmaceutical companies established in market in the country, which create more competition .So that is a threat for Square. Increase the price of raw material Lack of availability of raw material Huge import tax Competitor increase day by day 5.1 Conclusion: The purpose of this paper has been to analyze the market expansion activities of Square

Pharmaceuticals Ltd. SPL is a very big business organization. Therefore, its very difficult on my part to analyze its each and every strategy precisely in this small study. There can be various ways through which a business organization can achieve success in the market, after scanning its external & internal environment and considering all alternatives, I have tried my level best to sort out the best way as per my thinking ability for SPL to run ahead. But finally I can say this much that it has a large potential both in the short and long run due to its sound distinctive competencies. 5.2 Recommendations: New Category Opinion Leader Doctors are the only opinion leader in SPLs present strategy. It may be partially good, but can not be perfect as the completion becomes more intense day by day. There are some other parties who have the scope and ability to act as opinion leader and to motivate the buyer. These potential opinion leaders are remaining unexploited. SPL has enough resources to let them add value to the company. Customer Once, Client for ever Client is more profitable than customer in terms of both transaction as well as positive wordofmouth communication. He himself can be an opinion leader. So, I am suggesting adopting some programs that will let its customers be transformed into clients. The following model would better describe this concept: SPL has a strong brand image in pharmaceutical industry. It will facilitate this strategy. I am citing some instances here which may be useful for this strategy: a. Mobile Hospital service with free treatment and medicine. b. Health awareness program in rural area. c. Modernization of educational institute or public hospital etc. Keep Pace with the Race Todays world is changing very rapidly, in every sphere. Therefore, updating production plant alone is not enough to cope with the new environment. SPL has to have a keen eye if there is any change in HR development, transport, information technology, consumer relation management, medical science and so on. 22 Integrate Greatly

SPL imports 80% raw materials of its total requirements. This is a weakness if it wants to consistently expand its market. So it requires either more API plants or increase in present production capacity. Discover the undiscovered Pharmaceutical value chain is a bit different from traditional value as it includes an additional step Discovery. In the start this step is a vital strength of any pharmaceutical company. SPL lacks this component in its value chain Innovation is the Destination Pharmacy is on the brink of a scientific and technological revolution that will ultimately transform both the nature of the medicines it makes and how it makes them. In future, then, Pharmacy will not only make the white powders, creams and tablets it has traditionally produced, it will manufacture a complete mix of biopharmaceuticals, parenterals and diagnostics. Making targeted treatment solutions will generate greater revenues than conventional drugs and offset the increasing competition from generic producers. But it will also require the restructuring of the entire pharmaceutical value chain, including the fixed asset base and downstream distribution. Segment the Current Market Segment SPL is in need of more segmentation tools in an ongoing effort to establish close and sustainable relationships with customers.

Current Market Overview: In Bangladesh Pharmaceutical Market, Antiulcer is one of the fastest growing portfolios. It is because of our unhealthy food habits, lifestyles, activities & overall situation says that the majority of our population suffers from Hyperacidities. Thats why this market is expanding day by day with the time passes & there are huge potential factors to introduce a new Antiulcer product in the market. And because of its potential market we become interested & planned to work in it. Thats the main background for choosing omeplizor injection preparation. Competition: Competitors are divided into two parts. The Companies which are offering the Omeprazole Injection preparation with exactly same molecules are considered direct competitors. And the companies which are offering the preparation with not exactly same molecules but somewhat similar molecules which works for same The major Competitors: Incepta, ACI, Popular Keys to Success: The keys to success are: 1. Holding the position of market leader in the Pharmaceutical Industry 2. Already Enjoying Excellent market reputation. 3. Superior quality products. Critical Issues The most challenging job in marketing Omeprazole Injection will be establishing our brand of Omeprazole Injection in a market where many other Omeprazole Injections already established & accepted by all. People used to stick with a product that works well for them. And they used to show resistance in adapting a new preparation of Omeprazole Injection. We need to show & convince that our preparation is more safe & effective to encounter competitors Omeprazole Injection. SWOT Analysis: Strength: It has Company Strength & product strength, Company

strengths effects positively on the product, & products strength also effects positively on the Company. Square has highly skilled sales forces & very efficient & wide distribution channels. Square ranked & held the First position in Pharmaceuticals Industry since 1985, which means it is in the top for last 28 years, Being in the top for this long time resulted in a very positive impression for all our products in the minds of the doctors & patients already, it occupies a good position it their minds. The built in positive impression on our products which is in the minds of the doctors & patients helps us to get a very good response from the market for any product we introduce in the market. We can say very confidently that the number of sales force of the company, their capability, Training & selling skills are in better condition & position then any other company in the industry. Square follows very transparent marketing activities; there is no misleading or fraud, thats why it enjoys a good reputation in the market. Square maintains high quality standards for its products, that why it enjoys a good position in the market In production of Squares Omeprazole Injection & DMP quality issues are followed & maintained properly. The desired AC TC level are ensured 100% Weakness: Square has introduced the Omeprazole Injection late in the market Omeprazole Injection has introduced already by Incepta & popular before Square Square has lost the opportunity to be the be the first introducer & cant enjoy the benefits of it. Square needs to consider the loss of late introduction & work on market considering this disadvantage. Opportunity: In the market, the number of Antiulcer patients is increasing, when the number of patients increases the possibility of a good return from the required drug increases. On that perspective we are seeing a good opportunity for our Omeprazole Injection since the market is growing. Threat: Some other companies are planning or in process to introduce Omeprazole Injection in the market.

When they will introduce, they will through a competition in the market as well. Square needs to consider the competition in planning of their marketing strategies to respond to this threat & fight back. Marketing Strategy: Mission: To launch the most safe & effective Omeprazole Injection in the market & provide assistance to the gastroenterologists & Surgeons in treating people in an efficient way. Marketing Objectives: Qualitative: We have to establish in the Omeprazole Injection market that Squares Omeprazole Injection preparation is the best in terms of quality & effectiveness among all competitors Quantitative: To grab 30% of market share within first year of product launch. Target Market (Segmentation): 85% of target market will be Hospitals & clinics doctors Remaining 15 % will consist of other doctors which will be gastroenterologists, Surgeons, General practices. Positioning: Ideal Omeprazole Injection in the medical Association Strategies: The marketing strategy will seek to first create awareness regarding our Omeprazole Injection, develop the customer base, and work toward building doctors loyalty and preference. Extensive Champaign & direct marketing will be used to communicate the message. Initial samples & gifts will be provided depending on the target segment that we are trying to reach. Product Strategy: Square Pharmaceuticals prepares Omeprazole Injection from the highest quality raw materials available in the market. It ensures strict compliance with WHO cGMP standards and local regulatory norms in every phase of sourcing & procuring quality materials, manufacturing, quality assurance and delivery of Omeprazole Injection. It also ensures that all activities passes through documented Quality Management System (QMS) complying International Standard requirements of ISO 9001 through continuously developing Human Resources by regular training and participation. Square Pharma is committed to undertake appropriate review, evaluation and performance measurement of processes, business

activities and Quality Management System for continual improvement to ensure highest standard and customer satisfaction. Pricing Strategy: Since we know that we are introducing Omeprazole Injection late in the market, already some other companies introduced it before we do, thats why there is no chance of innovation in setting the price, the price structure would be the competitors following price. We have to consider the competitors pricing who launched their products in the market already & set our price similar to theirs, we do not have the scope to increase or decrease the price, the logic behind it is that, since Omeprazole Injection is relatively expensive, and the competitors have established a price in the market already, so if we set the price according to their first introducing price than no controversy exists. And we are not in the ideal scenario for setting the price as some other companies have already fixed the price & the doctors accepted that price. So our price must be like theirs. This price structure is the best for this kind of scenario. Placing Strategy (Distribution): Squares own distribution channel & system will be utilized but focusing more on Hospitals & Clinics. Square has a very wide network of distribution system. It ensures to supply the right product in the right place in the right time. Distribution starts from the factory where is it is prepared, then it goes to DPG for calculating & clearing government taxes. From DPG the products are distributed to all the Depots in the country. Finally the products are distributed to the final destination which mainly consists of Hospitals & clinics. Square Pharma is equipped with high quality logistical & human support to maintain highest level of efficiency in distribution among all the companies in the industry. Promotion Strategy: The main promotion activities will be carried out by the medical representatives & they will be covering Hospitals & Clinics, as because a new product will be launched in the market, the management can think of a launching program or an introductory program. All leading gastroenterologists, Surgeons, General practice doctors who are practicing in Hospitals, clinics in Dhaka will be invited in that campaign to make the product familiar to them. In this way the message of our product can be

spread among the doctors. Since, it is not practical or difficult to go for nationwide campaign for a single product at once, so we will focus on the doctors based in Dhaka first but we will be ready to use mechanisms procedures to ensure that the message spreads to other doctors through their colleagues to all over Bangladesh. All doctors will be provided with initial samples & other promotional items. Marketing Research During the initial phases of the marketing plan completion, several medical representatives will be held to gaining sight into the targeted customer's mind and the processes of their decision making. They will provide the department with a wealth of information. Action Plans: 1st Month All leading gastroenterologists, Surgeons, General doctors will be invited in the launching programs in different important locations in Dhaka, to make them familiar with Seclo 40 mg. Initial samples & attractive gifts will be given to all participates. 2nd Month All Hospital based doctors will be invited in introductory programs & they will be given initial samples as well. Gifts will be distributed among the participating doctors, where our Seclo 40 mg will be highlighted on. 3rd month All intern doctors will be invited in a separate program & will be given initial samples & attractive gifts as well. Intern doctors play a vital role in selection of the type or brand of the medicines for the patients. 4th Month Another program will be arranged for all nurses & sisters working in different hospitals & clinics, it is very important to make this product familiar to them as well, because they are practically involved more than others in giving treatment to the patients For the remaining 8 months, we will implement the previous 4 months actions in alternate ways so that each category (Senior Doctors, Intern doctors, Nurses & sisters) are dealt with in campaigns trice during the first year of introducing the Seclo 40 mg brand of Omeprazole Injection. Budget: Sales Forecast: Month Number of

units (Per unit = TK 70) Sales January 3000 units 2,10,000 TK February 3500 2,45,000 March 3000 2,10,000 April 4000 2,80,000 May 5000 3,50,000 June 4500 3,15,000 July 5500 3,85,000 August 5000 3,50,000 September 6000 4,20,000 October 7500 5,25,000 November 8000 5,60,000 December 8500 5,95,000 Total 63,500 units 44,45,000 TK Promotional Expenses Forecast: Month PPM No. of Samples Gifts in TK January 57250 TK 315 boxes 23800 TK February 15000 260 14000 March 15000 260 14000 April 15000 260 14000 May 15000 260 14000 June 15000 260 14000 July 15000 260 14000 August 15000 260 14000 September 15000 260 14000 October 15000 260 14000 November 15000 260 14000 December 15000 260 14000 Total 222250 TK 3175 boxes (222250 TK) 177800 TK Expected Revenue: Revenue (Tk.) 44,45,000 Less: COG (15%) 6,66,750 Gross margin (Tk.) 37,78,250 Less: Marketing expenses: Physician's sample (5%) 2,22,250 PPM Cost (5%) 2,22,250 Gift (4%) 1,77,800 Fixed admin.cost & sell & dist. Incl discount (7%) 3,11.150 Total expense 9,33,450

Net profit before tax (Tk.) 38,44,800 Total expense of net revenue (%) 21% Controls & Evaluation: The purpose of the marketing plan is to serve as a guide to the organization. The following areas will be monitored to measure performance: 1. Revenue: monthly and annual. 2. Expenses: monthly and annual. 3. Number of Repeated orders. 4. Customer satisfaction level. 5. Changes in the market share Square Pharmaceuticals evaluate & control the actions through a continuous process. Supervisors check the actions implemented & measure their effectiveness comparing with standards set by the organization. Medical representatives who work in the market field collect the feedback, responses, suggestions, opinions from the doctors, nurses, patients & other experts of the market and provide the collected information to the head office. The head office passes the information to the related respective departments. Control & evaluation committee analyzes the data & take correction measures & make recommendations to the related departments about the new actions to be implemented considering the responses & changes in the market. Bibliography/ Reference: 1. Ahmed Qamrul Alam, Assistant Marketing Manager Square Pharmaceuticals Ltd 2. Mr. Jahangir Medical Representative, Square Pharmaceuticals Ltd 3. Internet

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 2006 2007 2008 2009 2010 Companys Growth Rate National Market Growth Rate

Industry Analysis
With a USD 600mn industry and an average annual growth rate of 12%, the Bangladeshi Pharmaceutical industry is the biggest (in volume) amongst all the LDCs. Primarily a generics industry producing about 8,000 different brands which meet 97% of the domestic demand. Local companies enjoy 86% market share. Of the 245 registered pharmaceuticals, the top ten players account for 65% market share. According to the WTO TRIPS agreement, LDCs are exempted from Patent Protection until 2016 allowing legal reverse engineering and sale of patented products. This provides a unique opportunity for Bangladesh over India and China, who are under the patent regime. Bangladesh has made significant progress in the export market. Between 2003 and 2006 pharmaceutical exports increased to about 61 countries from 51 and quadrupled in value from USD 7.9mn to USD 36.5mn. Since many companies have acquired international certifications like USFDA, UKMHRA and TGA, Bangladesh can penetrate into regulated and unregulated markets. The pharmaceutical sector attained a growth of 6.91% during the year 2008 as against 15.80% during the previous year. The national pharma market growth and that of the company during the past few years are given below: Firm Valuation Square Pharmaceuticals Ltd.

Background of Square Pharmaceuticals Ltd. In the Bangladeshi

pharmaceutical industry we have focused on Square Pharmaceuticals in our report. Square pharmaceuticals ltd. maintains a vast array of partnerships with virtually every major company chain and most independent properties both domestically and internationally. The company was founded in 1958 by Samson H. Chowdhury along with three of his friends as a private firm. It went public in 1991 and is currently listed on the Dhaka Stock Exchange. Square Pharmaceuticals Ltd., the flagship company, is holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985 and it has been continuously in the 1st position among all national and multinational companies since 1985. Square Pharmaceuticals Ltd. is now on its way to becoming a high performance global player Square Pharmaceuticals Limited is an organization with equal emphasis on Leadership, Technology, Quality and Passion. Square Pharmaceuticals Ltd. is the leading branded generic pharmaceutical manufacturer in Bangladesh producing quality essential and other ethical drugs and medicines. It was established in 1958 and has been continuously in the 1st position among all national and multinational companies since 1985. And now SQUARE Pharmaceuticals is set on becoming a high performance global player in the field. SQUARE Pharmaceuticals Limited is the largest pharmaceutical company in Bangladesh and it has been continuously in the 1st position among all national and multinational companies since 1985. It was established in 1958 and converted into a public limited company in 1991. The sales turnover of SPL was more than Taka 7.5 Billion (US$ 107.91 million) with about 16.92% market share (April 2006 March 2007) having a growth rate of about 23.17%. Firm Valuation Square
Pharmaceuticals Ltd.

Company analysis
Porters 5-Forces Model: The 5 forces approach can be used in
initial diagnosis and as an aid to strategy development. Its main value is as a thought provoking aid to help arrive at a shared understanding of the threats and opportunities facing the firm. Whilst it is a powerful and simple tool for analysis, it doesn't look in great detail about the choices or the ease or difficulty in following a particular course of action. Over the past few decades, the pharmaceutical industry has been struck by many challenges. There have also been opportunities such as: revolutionary developments in information technology and the emergence of market institutions. The pharmaceutical industry includes all companies that develop drugs to consumers. Now we will analyze how Michael Porters five external environmental forces affect the profitability of a pharmaceutical industry as a whole. Figure: Porters Five Forces Model for Industry Analysis. Firm

Valuation Square Pharmaceuticals Ltd.

Threat of New Entrants: Threat of new entrants in the pharmaceuticals industry is very low because of the high cost of R&D and patent limitations required to enter the industry. Even though, the economies of scale for production may not be very significant, other barriers to entry are high. To develop new drugs is a very costly and timely process that requires a lot of research and development. Along with high R&D costs, the heavy regulation of the pharmaceutical industry is another barrier to entry. All drugs and chemicals used need to be approved and when the drugs are not approved, the time and money used to develop them is lost by the firm. The standards are very strict. The established firms have large budgets to spend on marketing to uphold their brand, just another cost necessary for a new entrant. Industry Rivalry: The pharmaceuticals industry is a highly competitive and aggressive market. With strict govt. regulations, high costs with research and highly competitive products in the market place, companies are left frantically trying to release the next best miracle product to stay ahead. Advantages are gained by first mover advantage (patents). Bargaining Power of Suppliers: It is essential to identify the suppliers for the pharmaceuticals industry. The suppliers could be wide variety of the providers such as the raw materials and intermediates, the manufacturing and production plants, the overseas head offices who supply finished products, the local comarketing partners who supply products or third party suppliers anywhere along the supply chain. Also labor can be considered as a supplier to industry. All suppliers provide different levels of threat. It is not easy for the pharmaceuticals industry to change suppliers even when they threaten to withhold supply. Labor can also be the significant supplier because labor holds immense power when enquiring for more compensation or reducing quality by working fewer hours. In the pharmaceuticals industry, each supplier holds a certain level of power to be a threat, but it is not too high. The threat from suppliers in the pharmaceuticals industry is not considered significantly bigger than that in other industries as long as there is no considerable threat from the raw material suppliers. Thus, supplier power is low in the pharmaceuticals industry. Firm Valuation Square Pharmaceuticals Ltd.


Bargaining Power of Buyers: Major consumers in pharmaceuticals industry include doctors, patients, hospitals, drug stores and pharmacists. There are several significant indicators of the threat of buyers in the pharmaceutical industry; they include the number of buyers, product differentiation, and product significance of a buyers final cost. Buyers do not pose a big threat to pharmaceuticals industry, because firms spend most of their research and development on new patent drugs. Since the industry has many buyers, and given that competition normally occurs among consumers, (e.g. competition among hospitals and drug stores); the power of the buyers in terms of the number of buyers in the industry is relatively small. Although big retail stores possess some bargaining power in the industry, they do not pose a big threat in the pharmaceuticals industry as they do to the other industries. Threat of Substitutes: Threat of substitutes is low (with patents) and medium (after patent expiry). Overall, the pharmaceutical industry shows an upward trend in its core markets. The industry remains highly valued has a favorable market position with strong financial make-up and strong earnings growth. Its future potential demand trend is positive and despite increased competition the industry still shows a continuing upward growth momentum. Firm Valuation Square Pharmaceuticals Ltd.


SWOT analysis: The following SWOT analysis captures the main

strengths and weaknesses within the company, and describes the opportunities and threats of the company. Strengths: Highly experienced Senior Executives some of whom has local and International significant pharmaceutical literature. Good reputation with high image. Efficient, skilled, experienced and dedicated staff members Large customer Base and product development capabilities and outstanding Professional services. Resources are available in Bangladesh Square pharmaceutical Ltd is able to make benchmarking medicines Increasing presence in the market Regulatory performance is strong and positive Employee mobility is lower than that of its rival. Weakness: Non-availability of high technology Everything is not organized. Time consuming decision making process Incorrect method for collecting resources and inventory management Lack of asset management and debt. Minimum profit in comparison with others. Opportunities: Government Support Banking and information technology Credit line with well known foreign bank can gear up its foreign exchange business. Entering in new arena product helps to grow customers' confidence. Opportunity to take market share away from rivals by offering new Innovative product or services. Opportunity to enter into the global market. Threats: Hiking price of raw materials: More and more factories, especially small ones, are Facing closure due to price hike of raw materials. As we are just entered in the market it will be a great threat for us. Firm Valuation Square
Pharmaceuticals Ltd.


Inadequate Power supply: The industry sources also blamed lack of adequate power Supply for making the industry more vulnerable. We have to face the same problem Here and for this many industries are shutting down now days. Mergers and Acquisition Frequent Currency Devaluation Competitors are much in pharmaceutical industries. Competitors are offering innovative new product and services regularly. Matching them is really hard.

Compliance with Accounting Principles: The financial

statement, prepared in accordance with the International Accounting Standards (IAS) as adopted by The Institute of Chartered Accountants of Bangladesh (ICAB) as Bangladesh Accounting Standards (BAS), give a true and fair view of the state of affairs of the company and its subsidiaries and of the results of its operations and its cash flow and comply with the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations. The elements of financial statements have been measured on "Historical Cost" convention in a going concern concept and on accrual basis in accordance with generally accepted accounting principle (GAAP) and practice in Bangladesh in compliance with the Companies Act 1994, the Securities and Exchange Rules 1987, listing regulations of Dhaka Stock Exchange Ltd. (DSE) & Chittagong Stock Exchange Ltd. (CSE) and International Accounting Standards (IAS) as adopted by The Institute of Chartered Accountants of Bangladesh (ICAB), as Bangladesh Accounting Standard (BAS). Specific accounting policies were selected and applied by the company's management for significant transactions and events that have a material effect within the framework of BAS-1 ''Presentation of Financial Statements'' in preparation and presentation financial statements. The previous years' figures were presented according to the same accounting principles. Compared to the previous year, there were no significant changes in the accounting and valuation principles affecting the financial position and performance of the company. However, changes made to the presentation are explained in the note for each respective item. Accounting and valuation methods are disclosed for reasons of clarity. The company classified the expenses using the function of expenses method as per BAS-1. Firm Valuation
Square Pharmaceuticals Ltd.


Application of Bangladesh Accounting Standards (BAS): The following BASs are applicable for the financial statements for the year under review: BAS - 1 Presentation of Financial Statements BAS - 2 Inventories BAS - 7 Cash Flow Statements BAS - 8 Accounting Policies, Changes in Accounting Estimates and Errors BAS - 10 Events after the Balance Sheet Date BAS - 12 Income Taxes BAS - 14 Segment Reporting BAS - 16 Properties, Plant and Equipment BAS - 17 Leases BAS - 18 Revenue BAS - 19 Employee Benefits BAS - 21 the effects of Changes in Foreign Exchange Rates BAS - 23 Borrowing Costs BAS - 24 Related Party Disclosures BAS - 26 Accounting and Reporting by Retirement Benefit Plans BAS - 27 Consolidated Financial Statements and Accounting for Investment in Subsidiary BAS - 28 Accounting for Investment in Associates BAS - 33 Earnings per Share BAS - 37 Provisions, Contingent Liabilities and Contingent Assets BAS - 38 Intangible Assets Firm Valuation Square
Pharmaceuticals Ltd.


Valuation is about how to create shareholder value, which is what makes companies thrive. It shows executives and corporate finance practitioners how to value companies using the discounted cash flow (DCF) approach and apply that information to make wiser business and investment decisions, such as corporate portfolio strategy, acquisitions, or performance management. In finance, valuation is the process of estimating the potential market value of a financial asset or liability. Valuations can be done on assets or on liabilities. Valuations are required in many contexts including investment analysis, capital budgeting, merger and acquisition transactions, financial reporting, taxable events to determine the proper tax liability, and in litigation. Executives must not only have a theoretical understanding of value creation, but must be able to create tangible links between their strategies and value creation. This means, focusing less on recent financial performance and more on what they are doing to nurture a "healthy" company that can create value over the longer term. Valuation Methods: Business Valuation has become an intrinsic part of the corporate landscape. The corporate landscape has witnessed dynamic changes in the recent years as mergers and acquisitions, corporate restructurings, and share repurchases are happening in record numbers, both in the United States and abroad. At the core of the dynamics of all these activities stands some notion of valuation. The valuation methods are not only necessary for accounting purposes but they also serve as roadmaps for the angel investors, venture capitalists and corporate acquirers in order to know the true value of a companys assets. Although there are numerous individual valuation techniques, these are categorized into four standard business valuation approaches applying standard formulas: 1. Discounted dividends: this approach expresses the value of the firms equity as the present value of forecasted future dividends. 2. Discounted abnormal earnings: under this approach the value of the firms equity is expressed as the sum of its book value and discounted forecasts of abnormal earnings. 3. Valuation based on price multiples: under this approach a current measure of performance or single forecast of performance is converted into a value through application of some price multiple for other presumably comparable firms.

Firm Valuation Square Pharmaceuticals Ltd.


4. Discounted cash flow analysis: this approach involves the production of detailed, multiple-year forecasts of cash flows. The forecasts are then discounted at the firms estimated cost of capital to arrive at an estimated present value. Discounted Cash Flow DCF: A valuation method used to estimate the attractiveness of an investment opportunity. Discounted cash flow (DCF) analysis uses future free cash flow projections and discounts them (using the weighted average cost of capital) to arrive at a present value, which is used to evaluate the potential for investment. If the value arrived at through DCF analysis is higher than the current cost of the investment, the opportunity may be a good. Calculated as: This valuation method based on free cash flow is considered a strong tool because it concentrates on cash generation potential of a business. This valuation method uses the future free cash flow of the company (meeting all the liabilities) discounted by the firm's weighted average cost of capital (the average cost of all the capital used in the business, including debt and equity), plus a risk factor measured by beta. Since risks are not always easy to determine precisely, Beta uses historic data to measure the sensitivity of the company's cash flow, for example, through business cycles. This method estimates the value of an asset based on its expected future cash flows, which are discounted to the present. This concept of discounting future monies is commonly known as the time value of money. For instance, an asset that matures and pays $1 in one year is worth less than $1 today. The size of the discount is based on an opportunity cost of capital and it is expressed as a percentage. Some people call this percentage a discount rate. In finance theory, the amount of the opportunity cost is based on a relation between the risk and return of some sort of investment. Classic economic theory maintains that people are rational and averse to risk. They, therefore, need an incentive to accept risk. The incentive in finance comes in the form of higher expected returns after buying a risky asset. In other words, the more risky the investment, the more return investors want from that investment.

Firm Valuation Square Pharmaceuticals Ltd.


2005 2006 2007 2008 2009 Company Growth 13.08% 14.30% 22.94% 9.81% 18.83% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00%

For a valuation using the discounted cash flow method, one first estimates the future cash flows from the investment and then estimates a reasonable discount rate after considering the riskiness of those cash flows and interest rates in the capital markets. Next, one makes a calculation to compute the present value of the future cash flows. Here, Cost of equity, Ke = Rf + B ( Rm - Rf ) = 0.12 Cost of debt = 0.105 Interest rate on bond = 15% Debt % of Capital = 25% Equity % of Capital = 75% WACC = 0.11625