1.

Introduction
The pharmaceutical industry is one of the most technologically advanced sectors in Bangladesh.
It has grown in the last two decades at a considerable rate. The skills and knowledge of the
professionals and innovative ideas of the people involved in this industry are the key factors for
these developments. About 300 pharmaceutical companies are operating in this sector. Where
Only 3% of the drugs are imported and the remaining 97% are coming from local companies.

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 since1985.
It was established in 1958 and converted into a public limited company in 1991. The turnover of
Square Pharma was Taka 30.28 Billion (US$ 385.22 million) with about 18.64% market share
having a growth rate of about 25.36% (April 2014– March 2015). Square Pharmaceuticals
Limited has extended their range of services towards the highway of global market. They
pioneered exports of medicines from Bangladesh in 1987 and has been exporting antibiotics and
other pharmaceutical products in 36 countries like Asia, Africa, Oceania, Central & South
America, Europe etc.

Beximco Pharmaceuticals Ltd. is a leading edge pharmaceutical company and is a member of the
BEXIMCO Group, the largest private sector industrial conglomerate in Bangladesh. Beximco
started its operation in 1980, manufacturing products under the licenses of Bayer AG of
Germany and Upjohn Inc. of USA and now has grown to become nation's one of the leading
pharmaceutical companies, supplying 15% of country's total medicine need. The company has a
global footprint in more than 50 countries with visible and growing presence in regional markets
of Asia and Africa, and other emerging markets. And for contributing in global market BPL has
awarded the prestigious National Export Trophy (Gold) for five times. It has become the first
Bangladeshi company to export medicines to regulated markets of USA and Australia, besides
supplying sterile ophthalmic products to Europe.

Square and Beximco Pharmaceuticals are the positive example of developments in the
pharmaceutical sector which have enabled Bangladesh to export medicine to global markets. By
overcoming the underlying obstacles this sector is developing as effective exporting sector of
Bangladesh.

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 Limitation of the Study

 All the comments made, conclusions reached and suggestions for possible improvement
provided are purely based on our level of understanding, knowledge and our way of
interpreting a particular statement.
 Square and Beximco Pharmaceutical Limited follows a policy of not disclosing all the
information needed to prepare our report for obvious reason.
 Because of the lack of information, we have to make some assumptions that may cause
few errors or mistakes in the report.

2. The Background of Pharmaceuticals Industries in Bangladesh

Pharmaceutical sector is one of the successful sector in Bangladesh which is also the second-
largest contributor to the government earnings. The modern prosperous pharmaceutical industry
of Bangladesh has its root in Drug Law which was formed in 1982. The rules and regulations of
the Drug Act forms the foundation of the current industry. Before 1982, the pharmaceutical
sector like all sectors in Bangladesh was in a critical state. The industry suffered the greatest
negligence during the Pakistan regime. Most multinational companies had their production
facilities in West Pakistan giving Bangladesh little opportunity for technology transfer. After the
country’s independence in 1971, Bangladesh was in turmoil with an unstable economy and a
poor base in pharmaceuticals. Insufficient funds constrained the government’s scope to invest in
the health sector for several years. The majority of the population had little access to life saving
drugs. The situation remained the same till 1982 when the Drug Act of 1982 was formed
preceding the poorly planned Drug Act of 1940.

The history of pharmaceutical export from Bangladesh dates back to late 80’s. At that point in
time, only one or two pharmaceutical companies of Bangladesh took proactive efforts to initiate
export of pharmaceuticals from Bangladesh. Despite the fact that there was no support or
incentive from the Government. Then these companies with their own initiative started exporting
finished formulations to some of the neighboring less regulated overseas markets like Myanmar,
Sri Lanka and Nepal.

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2.1 History of Square Pharmaceuticals

Square Group is one of the largest and oldest companies in Bangladesh. Over the past years, it
has been able to build a strong brand image in the country while also growing at a consistent
rate. The beginning: SQUARE Pharma started in 1958 as a partnership firm. Today, it has 14
different companies, each operating independently. SQUARE Pharmaceuticals has been the

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market leader in the pharmaceutical industry since 1985.

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 Figure 1: History of Square Pharmaceuticals

2.2 History of Beximco Pharmaceuticals

Beximco Pharmaceuticals Ltd (Beximco Pharma) is an emerging generic drug player committed
to providing access to affordable medicines. Company’s state-of-the-art manufacturing facilities
have been accredited by the regulatory authorities of USA, Australia, European Union, Canada,
and Brazil, among others, and it currently focuses on building presence in many emerging and
developed markets around the world.

Beximco Pharma is consistently building upon its portfolio and currently producing more than
500 products encompassing broad therapeutic categories and the Company has created strong
differentiation by offering a range of high-tech, specialized products which are difficult to
imitate.

1976-1987

1976: Registration of the company

1980: Started manufacturing and marketing of licensee products of Bayer AG of Germany and
Upjohn Inc. of USA

1985: Listing in the Dhaka Stock Exchange (DSE) as a Public Limited Company

1988-1997

1990: Commissioning of Basic Chemical Unit

1992: Started export operation with Active Pharmaceutical Ingredients (APIs)

1993: First export market operation with finished formulation

1998-2005

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1998: First pharmaceutical company of the country achieving ‘National Export Trophy
(Gold)’for 1994-95

1999: UNICEF approval of BPL as an enlisted supplier

2000: Agreement to manufacture Metered Dose Inhaler (MDI) for Glaxo SmithKline

2001: Introduction of Small Volume Parenteral (Injectable) Establishment of Analgesic-Anti-

inflammatory API plant 2002: Won the first prize of ICAB National Awards 2000 for ‘Best
Published Accounts and Reports ‘in Non- Financial Sector Category The first Bangladeshi
company to supply pharmaceuticals to Raffles Hospital- the most prestigious hospital of
Singapore

2003: Received ‘National Export Trophy (Gold)’for consecutive 2 years (1998-99, 1999-2000)
Won the Silver prize of ICAB National Awards 2003 for ‘Best Published Accounts and Reports
‘in Non-Financial Sector Category. Won a tender to supply Neoceptin R and Neofloxin to
Raffles Hospital of Singapore for the whole year’s consumption Introduced Anti-HIV drugs for
the first time in Bangladesh. Diversification into Anti-Cancer therapeutic class.

2004: Signed contract with Novartis to manufacture their liquid, cream, ointment and
suppository products under “toll Manufacturing” agreement.

2005: Merger of Beximco Infusions Ltd. with Beximco Pharmaceuticals Ltd.

2006-2017

2006: Launched CFC free HFA inhalers for the first time in Bangladesh

2008: Received GMP accreditation from Therapeutic Goods Administration (TGA), Australia
and Gulf Central Committee for Drug Registration, for GCC states as the first Bangladeshi
company
2011: Received GMP accreditation from AGES, Austria (for European Union)

2014: Received GMP accreditation from Taiwan Food & Drug Administration (TFDA) and
Health Canada as the first Bangladeshi company

2015-16: Received GMP approval from the U.S. FDA as the first Bangladeshi company

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Launched generic version of revolutionary hepatitis C drugs Sovaldi® and Harvoni®

Received product approval from Health Canada as the first Bangladeshi company

Entered the Gulf pharma market (Kuwait) as the first Bangladeshi company-Won National
Export Trophy (Gold) for the record 5th time

2016-17: Became the first Bangladeshi pharmaceutical company to commence export of

pharmaceutical products to the USA.

Received approvals for two ANDAs (Sotalol tablets and Metformin ER tablets) from the US
Food and Drug Administration (U.S. FDA)

Formed the Company’s first overseas manufacturing collaboration with the joint venture with
BioCare Manufacturing (M) SdnBhd based in Malaysia.

Granted a sub-license by Medicine Patent Pool of the UN to produce Bristol-Myers Squibb’s

new hepatitis C drug Daclatasvir.

3. Market Share of Pharmaceutical Industry in Bangladesh

The pharmaceutical companies in Bangladesh usually provide branded-generic products. As a

result, the established brands like: Square, Beximco, Incepta Pharmaceuticals are able to charge
premium price for its products. According to IMS Health Care Report Q2, 2017 top 10
companies hold 68.49% of Pharma market share.

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 Chart 1: Market Share

Companies which are securing the position ranging from 11th to 20th on the basis of their
relative market shares hold only 17.84% market share. Summing up, top 20 companies hold
86.33% market share, leaving 13.67% market share to other existing companies. It is to be noted
that top 20 companies held 85.97% market share in 2016 Q2. Aggregate market share of top 20
companies has increased.

The Pharmaceuticals market is concentrated among few local companies only and entry barrier is
higher due to large capital investment and governmental bindings. Square Pharmaceutical is the

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market leader having 17.73% market share followed by Incepta, Beximco, Opsonin and Renata.
Multinational companies hold only 9.39% of market shares. The table below shows the current
market share hold by leading pharmaceutical companies as per IMS health report Q2, 2017 and
comparison against 2016 Q2.

The Pharmaceutical sector is one of the most developed among the manufacturing industries in
Bangladesh, although it is still small compared to other comparable sectors. The increase in
awareness about healthcare, higher income and increasing government expenditure have resulted
in higher demand for medicine. Bangladesh's pharmaceutical sector can grow more for the next

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five years riding on the expanded domestic market as well as new export frontiers, according to a
new research.

4. Macro Environment Analysis

4.1 External Environment Analysis

4.1.1 Economic Factor

The economic factor in the country affects the development of pharmaceuticals industry.
Pharmaceutical industry of Bangladesh is growing fast and the country’s economic condition is
contributing more on this. Inflation rate of Bangladesh currently is 5.57% which results interest
rate 6.5% (Bangladesh Bank). If the inflation rate increases more than that the value of money
will decrease. It means that the value of money is decreasing and people will have to spend
more on medicine which is difficult for people. If the money losses its power, then industry
growth will be decrease because firm interest rate also increase. Economic conditions also affect
the countries expenditure pattern. If there is economic crisis in the country or crisis in the world
people will try to spend less in their healthcare. Then the government will try to regulate the
price and pharmaceutical companies will lose their premium income. If the crisis is global than
the countries net export will decrease which will be a great barrier to reach the export goal of
Bangladesh.

4.1.2 Socio-cultural Factor

The socio-cultural factor is very important in the context of Bangladesh. The most of the
Bangladeshi population is young and their immune system is much better than the older
population which is influencing the growth of pharmaceutical industry. We have social and
cultural factors like poverty, malnutrition which are an alarming rate right now. So the
pharmaceutical industries need to have a great concern to address the new trend of problems.
Pharmaceutical industry can do a great deal of work in the healthcare. Pharmaceutical industry
can reduce the unemployment rate specially the women in Bangladesh. Education is shaping the
pharmaceutical industry by providing quality employees. As the people of this country getting
health conscious it will pressure the pharmaceutical companies to provide quality product and
invest in research and development.

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4.1.3 Global Factor

Pharmaceutical industry is always influenced by global competition. Countries with better global
reach have advantage to succeed in the business. Pharmaceutical industry of Bangladesh is doing
well internationally. Bangladesh exported pharmaceutical products to 105 countries. Myanmar
imports the highest quantity of medicines worth $13.60 million followed by Sri Lanka with
$13.38 million, the Philippines with $6.10 million. Bangladesh set a target to explore 30 new
destinations and grab larger market share. Bangladesh pharmaceutical export will cross $ 1
billion landmarks within 2018 (Pharmaceutical Sector Overview, EBL securities LDT.).
International law changes the pharmaceutical industry. For example, Bangladesh will enjoy
patent free production till 2032. So we don’t need to spend our money and it will reduce
production cost. What Bangladesh needs is that maintaining the growth. To maintain the
expected growth rate pharmaceutical companies needs to improve the quality of their product. To
improve their quality companies needs to invest in research and development to compete
globally. Bangladesh has tariff free export advantage in some and industry needs to capitalize the
advantage.

4.1.4 Technological Factor

Technological factor has always influenced the pharmaceutical industry. Pharmaceutical

technologies changes frequently so it is important to use up to date technologies. In
pharmaceutical industry new technologies or new information creates new opportunities for
companies. New technologies change the way companies communicate with their customer. The
use of new technology in the preparation of the drug is becoming most important and carries out
different development work that helps the industry for improvement of medicines Customers.

4.1.5 Political/legal Factor

Government always tries to control the manufacturing of medicines and drugs to protect people
from illegal activities. Government tax rate affects the pharmaceutical industry. For example, if
the government increases the tax on raw material then pharmaceutical companies will have to
charge more money from the customer. This will create dissatisfaction in the customers. If the
government put restriction on foreign medicine than local pharmaceuticals can grow.

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Government can fix the retail price of all medicine in the pharmaceutical industry. If will affect
the profitability of the company. For example, if the government set the maximum retail for
medicine then the company will earn less. Most of the companies are publicly listed so the
company will not able to give dividend to their stockholder and invest in research and
development. Ultimately fall of production quality. So the political and legal environment plays
essential role in shaping pharmaceutical industry.

4.1.6 Demographic Factor

Bangladeshi pharmaceutical companies produce all kinds of drugs. Some manufacturers are
producing world class quality drugs. Others are trying to reach their target. Peoples demand for
drugs is increasing and quality improving. Pharmaceutical industry is influenced by
Demographic factors like population size, age structure, geographic distribution, ethnic mix,
income distribution. For example, if the population is very old or very young the pharmaceutical
industry will shape differently. Bangladesh has different kind of people and people are working
in the same factory that changes the work environment and production quality.

4.2 Internal Environment Analysis

4.2.1 Porters Five Forces Factor:

Michael Porter's five forces is a model used to explore the environment in which a product or

company (or business unit) operates. Porter recognized that organizations likely keep a close
watch on their rivals, but he encouraged them to look beyond the actions of their competitors and
examine what other factors could impact the business environment. He identified five forces that
make up the competitive environment, and which can erode your profitability.

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These are:

Figure 2: Porters Five Forces

4.2.1.1 Threat of new entrants: Low

A company that wishes to enter in a pharmaceuticals industry requires huge capital expenditure
and regulatory permission from the drug authority; which creates a significant barrier to enter in
the industry. Furthermore, customer’s loyalty to the drugs of established brands, access to
distribution channel creates further barrier. In Bangladeshi pharmaceutical industry, there are
many large companies operating their business successfully, like Square, Incepta, Beximco,
Opsonin, Renata etc. As a result, any new entrants will face tremendous competition with these
renowned companies. So it is very difficult for new entrant to capture the market because
reliability is a crucial factor in pharmaceutical industries. Again, if new company tries to
compete with the existing companies they may have to face the challenge of the competitors
having lot of resources. This causes threat of new entrants in the industry significantly low.

4.2.1.2 Threat of substitute product: High

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The retail consumer of pharmaceuticals product often switches from one brand to another. There
are many substitute brands of single medicine. If consumer does not find one brand, he switches
to another brand very quickly. Also, there are different options to the prescribers and patients in
therapeutic situations in Bangladesh. At present, there are 269 allopathic, 205 ayurvedic, 266
unani, 27 herbal and 79 homeopathic drug manufacturing companies operating in the country. As
a result, patients have a number of choices regarding medication. So, they may perhaps try for
substitute one for another. Thus, the threat of substitute product is very high.

4.2.1.3 The bargaining power of buyers: Very Low

In pharmaceutical industries, the consumers have little bargaining power. The government
strictly maintains the retail price of lifesaving drugs. The Pharmaceutical companies are free to
set up the price of other drugs. The patient typically depends on the prescription provided by
physicians.In Bangladesh there is a trend of influencing medical practitioners, wholesale and
retail shops of pharmaceutical products to promote products. Thus they have no choice to take
alternative medicine. As medication is the most important need for community and price of
medicine of all the companies are almost relatively at the same level buyers have little
bargaining power.

4.2.1.4 The bargaining power of the supplier: High

Bangladesh imports 99.5% of raw materials of pharmaceuticals industry which are mainly from
China and India. Bangladesh can also import API from European supplier. But, it will incur more
cost if Bangladesh imports raw material from European supplier. Concentration of the supplier
and high switching cost creates high bargaining power of the supplier. However, commercial
operation of API Park in Munshiganj will certainly decrease import dependency for raw material.
Hence, bargaining power of supplier is expected to decrease in near future.

4.2.1.5 Rivalry among the exiting competitors: High

The pharmaceuticals market is highly concentrated. Top 20 players dominate the major portion
of the market. Every company has the same medicine in different brands. The companies are
competing with each other fiercely in order to grab market share.

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 5. Export Scenario of Bangladesh

The pharmaceuticals industry in Bangladesh is now exporting over hundred countries around the
world. The major destination for Bangladeshi Medicines is Myanmar, Srilanka, Kenya and also
many European countries. The growth in export had averaged over10% from 2010 to 2014. From
recent data, according to Bangladesh Association of Pharmaceutical Industries (BAPI),
approximately 1,200 pharmaceutical products received registration for export over the last two
years.

Chart 2: Export of Pharmaceuticals Product of Bangladesh and Growth.

According to Bangladesh Export Promotion Bureau, Bangladesh exported pharmaceuticals

product to 107 countries in the fiscal year 2016-17. Among 107 exporting countries, top 7
countries (Myanmar, Sri Lanka, Philippines, Vietnam, Afghanistan, Kenya and Slovenia)
constitute 60.32% of total pharma export.

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 Chart 3: Export of Pharmaceuticals Product of Bangladesh and Growth.

And the rest 39.68% came from other countries. During that period, Bangladesh exported
pharmaceutical products was worth of USD 89.17 million as against USD 82.11 million in 2015-
16. From July to October 2017-18, Bangladesh exported USD 32.1 million worth of
Pharmaceuticals products. From 2011-12 to 2016-17, export revenue was 13.23%.

But the export sales only contributed 4.59% of pharmaceuticals market in 2015-16 (Considering
USD 1 = BDT 80). Hence, the contribution of export sales in pharmaceuticals industry is low.
Here, the Square Pharmaceuticals is holding the first and Beximco Pharmaceuticals is holding
the second position on sales.

Chart 4:
Export Sales
of Selected
Pharma
Companies in
2015-2016

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The Pharmaceuticals Company of Bangladesh can only export different medicine to other
countries when they get approval of the particular medicine from the drug authority of that
particular country. The approval from developed countries signifies that the local medicine has
international standard which helps them to build a strong position in local market.

In recent time, the Government of Bangladesh has given huge emphasis on the export of
Pharmaceutical products from Bangladesh. It is targeted that Pharmaceutical will be the second
exporting product after readymade garments. The Government of Bangladesh has set up an
export target of USD 100 million of Pharmaceuticals products for 2019-2020 (Source: Financial
Express).

6. Value Chain Analysis of Square & Beximco Pharmaceuticals

Value Chain Analysis is a systematic process in which a firm identifies and analyses its primary
and secondary activities, which add value to final product in order to reduce the cost and increase
differentiation.

Value chain analysis is powerful systematic approaches which can help us explore the
opportunities, think in a creative way, maximizing the efficiency, reducing cost, creating the
competitive advantages, improving the profitability etc.

6.1 Square Pharmaceuticals:

Value Chain of a Pharmaceutical Company is a bit different than other company. Their Research
is much more important. Researchers research on the disease and then formulate the medicine.
Later on they go for the manufacturing and Marketing and the product line extension of that
medicine.

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 Figure 3: Value Chain of Square Pharmaceuticals Limited

Square pharmaceutical value chain is a chain of activities which are involved in producing drugs,
starting with raw materials and ending with the delivered product. The chart below provides an
overview of some of the policies and initiatives which the Group has integrated into its business
activities to effectively address.

There companies had to invest more in the research division. Because, only through research
they can bring the new product as well as the solution of a diseases. All the activities of the
research come from the diseases. Researchers find out how to prevent the diseases and there they
find out what to produce as well as what will be the ingredients of the production and later on
they go for the marketing and other works, although the pharmaceutical companies spend less
money for marketing as it is prohibited to go through media like TV, billboard, newspaper etc.

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

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

The pharmaceutical value chain, including the specific elements of that chain, the value that is
provided at each step and the cost components that are incurred. These can differ both between
and within markets depending on the type of medicine, channel of distribution, reimbursement
regulation, or geographic region.

The dynamic pharmaceutical value chain is affected by customer loyalty, price differentials,
international competition and supply chain capabilities.

6.2 Beximco Pharmaceuticals:

The value chain is a tool for identifying ways to create more customer value because every firm
is a synthesis of primary and support activities performed to design, produce, market, deliver,
and support its product.

Beximco Pharmaceuticals Ltd is a leading manufacturer of pharmaceutical formulations and

Active Pharmaceutical Ingredients (APIs) in Bangladesh. The company is one of the largest
exporters of pharmaceuticals in the country and its state-Of-the-art manufacturing facilities are
certified by global regulatory bodies of Australia, European Union, Gulf nations, Brazil, among
others.

The company is consistently building upon its portfolio and currently producing more than 500
products in different dosage forms covering broader therapeutic categories.

Beximco Pharmaceuticals Ltd (BPL) should focus to create value for its customers.

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 Figure 4: Value Chain of Beximco Pharmaceutical

6.2.A) Primary activities:

1) Inbound logistics (material procurement): Beximco Pharmaceuticals Ltd needs to find

ways how cost effectively procures its raw materials for the products. Quality raw materials will
ensure quality finished products.

2) Operations (turn into final product): Global MNCs like Bayer, Germany and Upjohn, USA
is good in technology hence they possess advanced production methods to turn the raw materials
into quality final product. The whole idea should be about turning the raw materials into final
product effectively and efficiently.

4) Marketing (marketing and sales): Marketing and Sales should be such that the target market
can be influenced. Marketing and Sales approach for product are more formal and sophisticated.

5) Servicing (service after the sale): After sales service should make the customers at ease so
they don’t fall into hesitation or difficulty after buying the product. Beximco Pharmaceuticals

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Ltd should have the image in the customers’ minds that after buying the product they don’t have
to fall in a problem in case an after sale is required.

6.2.B) Support activities:

1) Procurement: A well trained procurement is required to ensure quality supply chain

management. The inputs needed to produce watches are sophisticated in nature and hence care
should be taken so that procurement ensures quality inputs.

2) Technology development: As said earlier global MNCs like Bayer, Germany and Upjohn,
USA are good an advanced technology for which top quality production is not a problem.
Beximco Pharma is one of the largest exporters of medicines in Bangladesh, winning National
Export (Gold) Trophy a record four times.

3) Human resource management (HRM): planning is the core area of all the functions of
management. It is the foundation upon which the other three areas should be built. Planning
requires management to evaluate where human resource of the company is Currently, and where
it would like to be in the future. From there an appropriate course of action to attain the
company's goals and objectives is determined and implemented.

4) Firm infrastructure: This refers to an organization's structure and its management, planning,
accounting, finance and quality control mechanisms. Beximco Pharmaceuticals Ltd (BPL)
should ensure that they have a proper management who can Manage properly the whole
operations, have an expert team looking after finance and accounts so that no fraud takes place
and proper budgeting can be done and maintain strict Total Quality Management (TQM) so that
the final products are strictly quality controlled.

7. Pharmaceuticals companies competing in global marketplace

Pharmaceuticals industry of Bangladesh has tremendous opportunity to grow in the future.
According to Zion Market Research, Global generic drug market is expected to grow at a CAGR
of 10.8% from 2016 to 2021 and reach at USD 380.60 billion by 20217. In 2016 alone, patented
drugs worth $60 billion are going off patent which opens up opportunities for generic
manufacturers around the world.8 Pharma companies of Bangladesh can become a global player

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utilizing this opportunity. Bangladesh offers significant manufacturing cost advantages due to the
lower cost of labor. Major generic hubs- India and China are losing cost advantages. Cost of
labor in Bangladesh is 3 to 4 times lower than that of China and India. Medicine price in
Bangladesh is currently among the lowest in the world. As a result, Bangladesh has opportunity
to export pharmaceuticals products more than India and China. At the same time, major producer
of pharmaceuticals raw materials India and China won’t be able to produce the patented raw
material due to the restrictions from World Trade Organization (WTO). Thus, Bangladesh can
export to foreign countries easily.

7.1 Strategies for competing in global marketplace

7.1.1 Export Strategy
An export is a function of international trade whereby goods produced in one country are
shipped to another country for future sale or trade. The sale of such goods adds to the producing
nation's gross output.

Exports are one of the oldest forms of economic transfer and occur on a large scale between
nations that have fewer restrictions on trade, such as tariffs or subsidies. Most of the largest
companies operating in advanced economies derive a substantial portion of their annual revenues
from exports to other countries. The ability to export goods helps an economy grow. One of the
core functions of diplomacy and foreign policy between governments is to foster economic trade
for the benefit of all trading parties. Exports are a crucial component of a country’s economy.
Exports facilitate international trade and stimulate domestic economic activity by creating
employment, production and revenues.

Companies export products and services for a variety of reasons. Exporting can increase sales
and profits if they reach new markets, and they may even present an opportunity to capture
significant global market share. Companies that export spread business risk by diversifying into
multiple markets. Exporting into foreign markets can often reduce per-unit costs by expanding
operations to meet increased demand. Finally, companies that export into foreign markets gain
new knowledge and experience that may allow the discovery of new technologies, marketing
practices and insights into foreign competitors.

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Companies that export are presented with a unique set of challenges. Extra costs are likely to be
realized because companies must allocate considerable resources to researching foreign markets
and modifying products to meet local demand and regulations. Companies that export are
typically exposed to a higher degree of financial risk. Payment collection methods, such as open-
account, letter of credit, prepayment and consignment, are inherently more complex and take
longer to process than payments from domestic customers.

7.1.2 Market Expansion Strategy

The dynamic business environment demands continuous change in the business practices. It is in the
terms of customer functions and groups and alternative technologies to broad the expansion scope.
Whenever an organization aims at high growth, expansion strategies are always followed. In other words,
it will be true to say that market expansion strategies are adopted whenever a business wants to expand its
activities. The general concept of expanding business is to sell your products to new groups of the
potential customers. Usually there are two ways to expand market share. These are:

1. Introduce more products to the market enabling you to access multiple customer databases.

2. Make use of your products that are particularly popular.

Types of Expansion Strategies

There are several other ways of business growth strategies. They are as follows:

 Expansion via concentration: This is the type of expansion strategy where businesses
invest in resources towards a particular product line with proven technology facilitation.
Using market penetration strategies, the firm may focus on existing market or existing
products may be offered new segments of customers. Moreover, it can also be done by
offering new products for the existing customer database.

 Expansion with the help of integration: This is done by expanding the scope of the
business by serving the same set of customers.

 Expansion through mergers, acquisition and strategic alliances: In this way two
companies syndicate their core competencies, resources and capabilities to look forward
for the mutual benefits.

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  Begin a chain: There are some businesses that can be easily replicated and turned in to a
chain. For example, retail stores, restaurant, bars etc. Take a close look at what made
your original store successful and follow the same rules for your chain. New campaign
can be initiated every time you open a new branch.

In short the above mentioned are the ways how to expand market shares. At times businesses
employee only one expansion strategy while sometimes a combination of business expansion
strategies is used. Situation and need varies business to business.

7.1.3 Licensing Strategy

Licensing means renting or leasing of an intangible asset. It is a process of creating and
managing contracts between the owner of a brand and a company or individual who wants to use
the brand in association with a product, for an agreed period of time, within an agreed territory.
Licensing is used by brand owners to extend a trademark or character onto products of a
completely different nature.

A company may choose to license its brand(s) when they believe there is strong consumer

acceptance for brand extensions or products. Apart from benefits to licensors, there are benefits

to licensees as well. Licensees lease the rights to a brand for incorporation into their

merchandise, but do not share ownership in it. Having access to major national and global

brands, and the logos and trademarks associated with those brands, gives the licensee significant

benefits. The most important of these is the marketing power the brand brings to the licensee’s

products. When brand managers enter or extend into new product categories via licensing they

create an opportunity for a licensee to grow their company. Below is an example of the licensed

product process steps:

 Licensor chooses the product categories to be licensed

 Licensor finds and negotiates a license with the best licensees

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  Licensees develop concepts, prototypes and final production samples and submit for

approval

 Licensor approves licensed products for sale

 Licensees sell licensed products to authorized retailers

Licensees expect that the license will provide them with sales growth. This sales growth may be

in the form of growth within existing market or the opportunity to enter a new market. To

achieve this, licensees expect that the brand they are licensing has significant brand preference,

that it will open doors and ultimately help them meet or exceed their business objectives. The

licensing contract forces the licensee to achieve certain sales targets and royalties; therefore, the

goal of the licensee is to quickly meet their business objectives, thereby achieving their contract

obligations. Royalties are the monies paid to a licensor by the licensee for the right to use the

licensed property. It is calculated by multiplying the Royalty Rate by the Net Sales.

7.2 Square Pharmaceuticals’ and Beximco Pharmaceuticals’

Strategies for Competing in the Global Market
7.2.1 Export Strategy
7.2.1.1 Export Strategy of Square Pharmaceuticals
Square Pharmaceuticals Ltd. exporting its finished products since 1995. And their main strategy
on export is given below:

 Offer best quality products on competitive price.

 To give more subsidy on contract manufacturing.
 Provides proper assistance on product promotion so that actual customers can get the idea
about the products.
 Providing proper training and development to their employees about overseas market.
 New chances to expand market through proper market exploration.

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These strategies are the main success factor for Square Pharmaceuticals. They are presently
supplying their product on European countries, Asian countries Like Afghanistan, Bhutan,
Nepal, Tajikistan, The Philippines, Vietnam, Yemen. African countries like Comoros Islands,
Eritrea, Gambia, Ghana. And as a strategy they exploring in some countries so that they can
expand their business like Algeria, Botswana, Central African Republic, Chad also some South
American countries like Belize, Costa Rica, Guatemala.

Square Pharmaceuticals Ltd always tries to keep ahead against rivals so that they are maintaining
the first position in Bangladeshi market. And some of their appropriate Future steps help them to
be competitive in global market.

 Strengthen its position in the present markets so that they can work on their lacking.
 Work is in progress to enter into regulated markets in Europe and United States which help
them to compete against other rivals in the market.

7.2.1.2 Export Strategy of Beximco Pharmaceuticals

Beximco Pharma always took the leading, proactive and pioneering role in exporting
pharmaceuticals from Bangladesh. Beximco Pharma commenced its international operations
with the export of API to Hong Kong in 1992 and formulation products to Russia in 1993.The
company have received the “National Export Trophy” (Gold) for an impressive five times. Since
then, BPL has taken greater strides over the years to increase its footprints in international
markets. And they follow some strategies for exporting their products globally which are given
below:
 Successfully venturing new companies through contract manufacturing which includes South
Africa and Netherlands Antilles, and registered 45 products in overseas markets. The
company achieved export revenues of Tk. 330.54 million, up 21.47% over 2009.
 Prioritizing and directing marketing operations to focus more on highly regulated markets
such as the European Union, USA, Australia and GCC member countries for value added
generics.

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 Beximco Pharmaceuticals actively taking measures to register their products in attractive
branded generic markets such as the CIS states and the EU countries. In 2010, Beximco
Pharma had 322 products registered in Asia, 91 in Africa, five in Central and Latin America,
and 22 in Middle East.
 BPL is constantly investing in its state-of-the-art manufacturing facilities to significantly
expand its capabilities to meet the regulatory requirements of developed countries. And their
products are highly trusted for their quality by physicians and consumers at home and
abroad. With this acclamation BPL is supplying different formulations from its portfolio to
renowned hospitals and institutions including Raffles Hospital, Heathway Medical Group
&K. K. Women, Children Hospital in Singapore; Asthma Drug Facility (ADF) in France.
 BPL has pursued approvals from different drug regulatory authorities, e.g. TGA (Australia),
GCC (Gulf Council), ANVISA (Brazil) and INVIMA (Colombia), which highlights BPL’s
credentials as it explores new opportunities in the export arena.

Beximco Pharmaceuticals Ltd. is consistently doing great in global market. And to compete
against their rival in global market their strategies are keeping more impact on that.

7.2.2 Market Expansion Strategy

7.2.2.1 Market Expansion Strategy of Square Pharmaceuticals

Square Pharmaceuticals is trying really hard for expanding its export sales. Each year the sales in
export are increasing with a satisfying percentage. It is assumed that the growth rate in sales of
export is more than 11 percent annually. The exports are expected to rise in the forthcoming
years as the expert analysis has interpreted. The company is making entry into foreign markets
and making efforts in registering its products in USA/EU countries for which is has already set
up a modern state-of-art production facility at Kaliakoir, Gazipur. Before explaining the market
expansion strategy of square pharmaceuticals in global market, let’s review their present
marketing mix which can be assumed by the following model:

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7.2.2.1.1 Marketing Strategy:

7.2.2.1.1.1 Identify target customers: Rather than the consumers of medicine pharmaceuticals

companies mostly target wholesalers, stockiest, deport/C&F, Chemists, private and government

hospitals of the exported countries. In order to sell the product or the medicines, it is a must the

company has to have those products licensed under the government regulation of the country.

Chemists are targeted most in order for their approval of the medicine which makes it easy for

the company to get the product licensed and create more credibility for the stockiest, wholesalers

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and health organizations. This is mostly done by the corporate officials of the square

pharmaceuticals company who travel country to country with the samples and demonstrate their

product to the health organizations and chemists of certain countries. Recently square has

increased their man power in this sector to demonstrate their products to more countries and

health organizations so that they can increase the target customers and sales in a much faster

way.

7.2.2.1.1.2 Value proposition: SPL has presently been offering its products to its market

segment with the value proposition “Utmost quality, excellent efficacy”. They are trying to add

more value to their company and product to make them recognizable all over the world which

will ultimately help expand their market globally.

7.2.2.1.1.3 Price: Pricing is a very important factor in terms of market expansion globally. India

is the cheapest of all the countries in terms of competing countries for Bangladesh. So in order to

capture the markets that are occupied by Indian pharmaceuticals SPL as a Bangladeshi company

has to decrease their price. Otherwise it will be difficult for them to take entry into new markets.

Drug pricing is heavily dependent on the National Drug Policy adopted by Directorate of Drug

Administration of Bangladesh Govt. Governments agencies act as a countervailing power in

pricing pharmaceuticals. Even then SPL has a very smart strategy which they apply within the

limit of governmental regulations that whenever a new product is launched they are priced lower

so that people can buy them easily and then they increase the price of the product or medicine

when it becomes popular. Similar sort of strategy they are also applying in terms of getting entry

to the foreign markets as well.

7.2.2.1.1.4 Promotion: Promotion is the most essential part of market expansion strategy for any
company and as well as for Square Pharmaceuticals Company. Mostly going door to door to the
foreign health organizations, public hospitals, private hospitals, chemists etc is one kind of
promotional activity for SPL. Also gifting many promotional items to the chemists and health

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organizations and NGOs is another policy for promoting their products. The most effective
promotion for SPL in the export market is their credibility as one of the best medicine producers
in the world and for that as much as licensing and compliance certification of the various
countries they can get is going to be beneficial for them to increase their market all over the
world.

7.2.2.1.2 Consistent up gradation of the Product:

SPL’s another strategy is upgrading and adopting new technology for its manufacturing plants
consistently so that it can produce quality product with comparatively lower cost (Paul,2009).

7.2.2.1.3 Low manufacturing cost through vertical integration:

SPL’s one of the most effective strategies is to integrate itself more vertically so that it can get
the raw materials cheaply. This comes really handy when the company is trying to expand its
market with low cost products. Fortunately for SPL, they have their own active pharmaceuticals
ingredients manufacturing facilities and more API factory is being established for future
(Paul,2009).

7.2.2.1.4 Product market growth matrix strategy of SPL:

On the basis of the above discussion, we can conceptualize the market expansion strategies of
SPL through the following figure
Products

Present New

M
a
r Presen Market Penetration Product Development
k
e t
t
s
New Market Development Diversification

Figure 6: Market Growth Matrix

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7.2.2.2 Market Expansion Strategy of Beximco Pharmaceuticals
Beximco Pharmaceuticals limited is another leading pharmaceuticals company who are
constantly competing with Square Pharmaceuticals Limited locally and globally. When it comes
to expanding the global market it is pretty obvious that BPL will go hand in hand with SPL in
any situation. BPL is aggressively pursuing to secure significant growth in export sales even
though lesser than SPL. In this direction their strategy is to expand the already expanded
international export market and further intensify potential new geographic locations.

AS SPL is BPL’s most direct rival in the local and global market both, it is predictable that BPL
would try to enhance their strategy to expand their market globally at the same pace with SPL.
The strategies for market expansion are more or less similar for all the pharmaceuticals company
because they have homogeneous target market. BPL and its whole corporation are pushing it to
their limits to license as much as their product so that they can make their company more
credible to the global market. Again the licensing of the product will be done in the different
countries will be more beneficial for them in the longer run. They are doing great progress with
achieving compliance certifications as well. Comparatively Square Pharmaceuticals Limited is
ahead of them in all this category. So in case of acquiring target market and expanding their
market this is one similar strategy that the both company are following. Also in terms of new
geographical market, both companies are trying to find countries where they will have less
competition.

Beximco Pharmaceuticals is ahead of SPL in terms of the strategy product presentation. This is
another factor which will help BPL to grab the market share of global pharmaceuticals industry
and increase their sales. Pricing is another issue which plays a vital role while a company is
trying to expand their market. Beximco Pharmaceuticals Limited is trying their best to give
quality product at a low price but in this case square is a bit ahead of them. In case of
promotional activity SPL and BPL apply more or less the same strategy.

Continuous upgrading of technology and product is something that each company needs to do in
terms of holding the market and expanding them as well. This is a key success factor for each
company that is heavily dependent on technology. It’s just a matter of efficiency in the
technological department which will give one company the competitive advantage over other

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company. That is why BPL and SPL both are very focused in their continuous upgrading of
technology and product.

7.2.3 Licensing and Compliance certifications of Square Phamaceuticals Limited

and Beximco Pharmaceuticals Limited
In terms of licensing Square Pharmaceuticals Limited is an expert on these sorts of things as they
started doing this from a long time back. In 1974 they started technical collaboration and became
license with Janssen Pharmaceuticals, Belgium, a subsidiary of Johnson and Johnson
International USA (Tashnim, 2017). They achieved first position in the Pharmaceutical market of
Bangladesh among all national and multinational companies and became pioneer in exporting
pharmaceutical products from Bangladesh (Tashnim, 2017). Square became USFDA and UK
MCA compliance standard in 2001 and their compliance factory was launched which was
operation built under the supervision of Bovis Lend Lease, UK (Tashnim, 2017). This is how
square expanded their market in United Kingdom and United States of America, two power
houses of the world. Similar strategies are implemented to capture other country markets as well.
Having compliance certification is a very strong indication for a company and it becomes
credible to the global market because of these global recognitions. They also perused
ROVIPHARM to sign agreement with them so that Vietnam could manufacture and market
Square Products under license in Vietnam (Tashnim, 2017). In 2003 they obtained ISO
9001:2000 Certification. Square also has UK MHRA compliance certification.

Square Compliance Certifications and Acknowledgements:

 UK MHRA GMP Certificate

 UK MCA Certificate

 US FDA Certificate

 European Union GMP certificate

Square’s products are licensed in all the countries below and also each country has given them
GMP certifications:

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Asia: Afghanistan, Azerbaijan, Bhutan, Cambodia, Georgia, Hong Kong, Iraq, Laos, Macau,
Malaysia, Maldives, Myanmar, Nepal, Philippines, Singapore, Sri Lanka, Tajikistan, Vietnam,
Yemen.

Africa: Cameroon, Eritrea, Ivory Coast, Kenya, Libya, Mauritania, Mauritius, Mozambique,
Nigeria, Somalia, Sudan, Tanzania, Uganda.

Oceania: Fiji, Palau, Papua New Guinea.

Central & South America: Belize, Costa Rica, Jamaica, Nicaragua, Panama, Suriname.

Europe: UK (Contract Manufacturing).

Any company from any industry if they want to do well in the export market and want to stay in
for longer run or to expand their business, they will need to have their manufacturing unit’s
compliance certified and also they will need their company and products licensed in other
countries if they want to sell them by their name. Having known that, Square Pharmaceuticals
Limited has done an outstanding job getting them approved by US FDA and UK MHRA who are
one of the most recognizable organization who give certifications to the medicine producers to
enhance their credibility in the market. SPL is also trying to get them licensed in new
geographical regions so that they can expand their market even further. In order to do so, these
compliance certifications are used as the most effective tools for the company.

Beximco Compliance Certifications and Acknowledgments:

 European Union GMP Certificate

 Approval for AND from Health Care Canada

 US FDA Certificate

 European Union GMP certificate

 GMP Certification from Brazil

Also Beximco has licensed their products more than 50 countries. They are also trying to expand
it further. The topic competing the global market for pharmaceuticals company rises and two
company automatically manifest in the mind that are Beximco Pharmaceuticals Limited and

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Square Pharmaceuticals Limited. They are the Leading pharmaceuticals company who exporting
medicine from our country and competing each other in the global market. In terms of expanding
the market for any pharmaceuticals company in global market they will have to arrange and
make them eligible for compliance certifications and try to license their product as much as they
can in as many countries as they can. This is the exact strategy Beximco Pharmaceuticals had in
their mega minds. However, the geographical areas are different than SPL for them to expand
their market. They have similar areas where they are doing business but Beximco is more
focused in the continent of South America as they are the first company from Bangladesh to have
GMP certified from Brazil—the largest market in the whole of South America whereas Square is
more focused in European countries specially in UK and they are pretty much ahead of Beximco
in US, Asia and Africa. That is why right now Beximco is looking forward to do business in the
areas where square has limited access for example South America and Canada. Both regions are
a big pharmaceutical market of the world.

SPL and BPL both are trying their best to gain as much as compliance certifications for their
manufacturing unit and trying their best to license their product all over the world wherever they
haven’t put their steps in. That’s why; licensing and compliance certification is a very important
aspect of global market expansion.

Patenting is another strategy which is highly effective in terms of holding and expanding the
market. The most interesting part of this strategy is that it allows you to do monopoly business
with the certain product. In case of Square Pharmaceuticals and all pharmaceuticals, patenting is
a very useful strategy. There are some drugs which is completely invented newly by any
pharmaceuticals if they want they can patent it but they have to make sure after patenting they
will have produce enough to meet the demand of that drug otherwise government will have to
allow other pharmaceuticals to contribute. Patenting is one of the most effective strategy in the
business world for monopolistic business.

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 8. Key Success Factors

Key Success Factors (KSFs) of Square Pharmaceuticals:

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

Marketing – related KSF

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

Technology – related KSF:

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

Manufacturing – related KSF: Continued investment in the core strength of Square and their
manufacturing plant led to recognition from European authorities and Square attained European
"Certificate of GMP

Compliance". Manufacturing and packaging operations are carried out according to the validated
methods through systematically qualified machines with full documentation at all stages of
operations.

Skills and Capability – related KSF:

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

Key Success Factors (KSFs) of Beximco Pharmaceuticals:

Marketing Related KSFs

 Breadth of product line and product selection.

 In time filling of customer orders.
 Attractive style and packaging design.

Technology Related KSFs

 Technical capability to make innovative improvements in production process.

 Product innovation capability.
 Research expertise in introducing new products.

Manufacturing Related KSFs

 Zero defect manufacturing.

 High capacity utilization.
 Availability of skilled labor.
 Low cost product design and engineering.

Skills Related KSFs

 Expertise in R&D and technology.

 Ability to develop innovative products.
 Quality control know-how.

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 9. Strategy Evaluation
Strategy evaluation is as imperative as strategy formulation as it puts light into the efficiency and
effectiveness of plan which is crafted to achieve the desired results. Strategy evaluation is one of
mandatory steps of strategic management. Here are some common traits of strategy evaluation:

 Fixing Benchmark of performance.

 Measurement of performance

 Analyzing Variance

 Taking corrective action

After going through this process strategy evaluation should—

 Commence managerial questioning

 Trigger review of objectives & values

 Invigorate creativity in generating substitutes.

Square Pharmaceuticals in general fix the benchmark of performance and after a certain time
period like quarterly or yearly, them measure the performance and take corrective action and
even go for the research if needed (Hassan).

There are four criteria for strategy evaluations; let’s see how Square Pharmaceuticals stand in
these four criteria:

8.1 Consistency: A strategy needs to perform at a similar scale for a company to get benefit out
of that strategy. In order to do so, the strategy has to be very consistent in terms of its
performance. Square Pharmaceuticals is a very old and established company who are doing
business in the local and global market for a long time. All the mainstream strategy they craft
and implement they make sure that those strategies perform consistently in their favor.

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8.2 Consonance: Consonance refers to the need for strategists to examine sets of trends, as well
as individual trends, in evaluating strategies. A strategy must represent an adaptive response to
the external environment and to the critical changes occurring within it (David, 2009).

Consonance is kind of like internal consistency but it is something that consistency with related
with the external environment. Consonance directly relates with external activity of the company
for example, how the market is acting, what are export scenarios, how political decisions
effecting the strategy of the business etc. All those strategies for Square Pharmaceuticals have to
have consonance in them as all the strategies depend heavily on the external factor of the
company. In order to make those strategies successful SPL needs to monitor the changes in
demand in the market, changes in export policies of the government, changes in the regulations
of International Medical Health Organization etc.

8.3 Feasibility: Square Pharmaceuticals will also need to evaluate their strategies in terms of
feasibility which they obviously do. There are feasibility factors in internal and external both
level of the company. Internally when they want to implement a strategy which is related to
technology, they will need measure the feasibility as if it is possible or not to successfully
accomplish the task. In terms of licensing, patenting and making the factory compliance SPL has
to have feasibility in their head to step ahead with any strategy.

8.4 Advantage:

These strategies will give a certain competitive advantage to the square pharmaceuticals limited
because, resources wise, skill wise and position wise SPL seems to have expertise in all three
areas. SPL has enough resources and skill to implement the strategies that are been crafted for
them to compete in the global market.

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 10. SWOT Analysis
The following SWOT analysis captures the main strengths and weaknesses within the
company and describes the opportunities and threats of the company.

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9.1 Strengths

Square Pharmaceuticals has highly experienced working team of which members are
internationally experienced. Also, mid-level managers are highly skilled and efficient. It is a very

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reputed company as it has been providing medicine and related product quite a long time. Also, it
has created a very strong and large customer base. The resources they use are collected locally,
so it is very much available and inexpensive which give a door-way to cost efficiency. Also its
licensing and compliance certifications make it even stronger in the export market.

9.2 Weaknesses

It does not use advanced technology in its manufacturing unit as it’s expensive and not yet
available in Bangladesh. Also, the internal and external operations are not organized enough. As
a Bangladeshi company, like others, it has bureaucratic decision making process. As a result,
the decision comes from the upper level which is very much time consuming. Square
Pharmaceuticals has inefficiency in asset management system. Lastly, as it offers its products at
a very cheap price, the profit margin is much lower than other pharmaceutical companies.

9.3 Opportunities

The government of Bangladesh has huge support for pharmaceuticals companies. As a result, the
company can gather capital easily from a different type of sources. So, expansion opportunity is
high. As Square is a reputed company and produce a quality product, it has huge opportunities to
expand its market globally. And locally, it has earned reputation. As a result, there is a chance of
gaining more market share in future. If it provides this type of product consistently, the
competitors will not be able to defeat this company.

9.4 Threats

Due to price hike of raw material, the production cost is going higher day by day. Doing business
locally it will affect all the other companies similarly but globally it would become a threat for
them in order to compete with foreign companies. Inadequate supply of electricity disrupts the
production system. Private power system requires more expenditure. For importing raw
materials, or exporting its products, it depends on currency exchange which is very volatile. It
makes the profit margin uncertain. Lastly, the industry is a growing one. So the competitors are
growing in number day by day.

11. Conclusion

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In this report, there are certain things which the organization should change or adopt for more
improvement in future. Still now, the products of the pharmaceuticals industries of Bangladesh
are not world class. Bangladeshi pharmaceutical sector is not fully self-sufficient as it is
dependent on various countries like China, India, Germany, UK, France, Italy, Denmark,
Switzerland, Austria etc. for raw materials. Bangladesh produce insignificant amount of raw
materials now. One main problem is in producing rare drugs foreign companies are ahead of us
in terms of quality, experience and market share. Most of the time, to purchase the medicinal
products is not depending on the customer choice. Customers buy their product according to the
prescription of doctors.

There is another profound problem which is the pricing of the product and competing with
countries like India, Vietnam, and Pakistan. These countries have the labor cost as cheap as ours
and at times they are being technologically even better than us which cuts their cost down than
us, especially India. It is really hard to compete in the global market against India because of
their better production capability.

Power supply is another issue of and manufacturing unit in Bangladesh. In terms of local market
this might not be an issue because more or less everyone will have the same treatment but in case
of competing in the global market government must give adequate power supplies to the
medicine manufacturing factories like Square Pharmaceuticals. Even though SPL has a lot of
manufacturing unit which are run thorough gas generator which actually makes the power cost
really low but there are a lot of units of the company who are run through diesel generator and
this power generation systems are all privately owned by SPL. This actually increases the cost
of the product for them to compete in the global market and that makes things difficult.

12. Recommendation

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According to the report, the vital problems Square Pharmaceuticals Limited are facing is lack of
modern technologies, pricing issue with countries with similar or less labor cost and insufficient
power supplies by the government. In order to eradicate these problems SPL will need to take
necessary steps.

The first problem is lack of modern technologies or more like not having the latest technologies
of the foreign companies of this global industry has. This is a very alarming issue which SPL
needs to focus on immediately. Medicine business is highly dependable upon the technology.
The better the technology or innovation is, the better the performance of the product would be
and the performance of the product will determine the sales of the company. This brings certain
differentiation in the product for the company which will make them charge higher prices from
the customers, hence profit maximization. SPL also needs to build their own facilities to
produce all kinds of raw materials they need and they shouldn’t rely on other countries. This is
will save a chunk of money in the future and will give SPL tremendous benefits in the global
market.

The second problem talks about the pricing competition among the low labor cost countries like
India, Pakistan and Vietnam, mostly India who is really difficult to beat in pricing and
sometimes technology in the global market. SPL will need to enhance their technological
strength and cut the labor and move more into automation to increase their productivity. This
will help cutting the cost of the product, hence lower down the prices in the foreign market. Also
they need invest more on Research and Development to innovate completely new product so that
they can do monopolistic business with that specific product.

To deal with the power supply problem SPL needs to convince the government to provide them
with better facility. They have to make the government understand the greater benefit the country
will get if they can capture more market in the global places. It will be great for the GDP, hence
the economy of the country. The government needs to focus in this sector as well to facilitate all
the pharmaceuticals company in Bangladesh.

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 13. References
Alam, S. M. (April, 2016). Strategic Performance Measurement of Beximco Pharmaceuticals Limited
with compare to Square Pharmaceuticals Limited: An Application of CORE Analysis. Research Gate.
University of Dhaka.

Gani, O. M. (June, 2014). Distribution System of Pharmaceuticals Program: A Study on Square

Pharmaceuticals Limited. Dhaka University, Journal of Marketing. V. 17, PP. 255.

Paul, K.S. (May, 2009). Market Expansion Strategy of Square Pharmaceuticals. Institute of Business
Administration. Rajshahi University. PP. 28-32.

Richard, M. (Unknown). Beximco Pharma Strategy. Scribd. Retrieved from

https://www.scribd.com/doc/120924064/Beximco-Pharma-Strategy

Thompson, A. A & Strickland, A. J. (2003). Strategic Management Concepts and Cases (13th Ed.).
Boston McGraw-Hill/Irwin.

Tashnim, M. (July, 2017). A brief History of Square. Future Startup. Retrieved from
https://futurestartup.com/2017/07/17/brief-history-square

http://www.squarepharma.com.bd

https://www.beximcopharma.com

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