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Pharamaceutical Industry Analysis of Pakistan
Pharamaceutical Industry Analysis of Pakistan
Group Members:
Abrar Ashraf, MBA (Banking & Finance), GIFT University, Gujranwala, Pakistan.
M. Awais Rafique , MBA (Banking & Finance), GIFT University, Gujranwala, Pakistan.
Salma Mehmood, MBA (Banking & Finance), GIFT University, Gujranwala, Pakistan.
Sitara Arif, MBA (Banking & Finance), GIFT University, Gujranwala, Pakistan.
EXECTIVE SUMMARY
and impacts of this industry on the economy of Pakistan. We have chosen Highnoon
data was collected from Chamber of Commerce and Ministry of health .This project is
a part of
our course Business Strategy & Policy. We visited Highnoon Laboratory Ltd with a
view to
We have completed this project successfully. Main thing that we learn from this
project is
Pakistan. We have been familiar with working environment as well as security and
control
required for such a big organization. They have safe guarded their profit margins
by diversified
Laboratory was also fruitful for getting information in this perspective. This
project will open a
new horizon for further researches in this area. This report will be useful for
Highnoon
Laboratories for the betterment in decisions regarding the road map in order to
achieve the
Pharmaceuticals are the substances that are aimed to treat, cure, prevent or
recognize diseases
Research and discovery are the essence of pharmaceutical industry, and its success
has played a
Such activities demand a sustain rate of huge investment over a long period.
Pharmaceutical
HISTORICAL BACKGROUND
At the time of independence there were only two small units which were enabled to
meet the
local demand. The rest of the medicines were imported. The decision taken in 1972
to abolish
brand names, restrict availability of essential drugs to 850, fix maximum retail
prices across the
board and freely allow local manufacturer of all the essential drugs was in fact
the life line for
Since 1999 the Govt. has invested US$ 133 million in the pharmaceutical industry.
The last 10
years was eventful for the Pakistan Pharmaceutical Industry because they have
developed a large
in Pakistan, including 30 multinationals who had over 53% of market share. Today
the industry
about half the population has no access to modern medicines. Clearly this presents
an
opportunity, but much more work needs to be done by the government and industry's
per capita consumption of less than US$ 10 per year and value of medicines sold is
expected to
evident, but per capita drug spending was rather low at around US$9.30 in 2007.
Private
spending accounts for 65% of total healthcare expenditure sourced through out-of
pocket
accounts for less than 1% of the country's GDP, comparable to levels in some
neighboring
GSK 11.6%
ROCHE 3.1%
“Highnoon for healthier nation”
5
COUNTRY DEMAND
Pakistan meets 80% of its domestic demand of medicines from local production and
20%
through imports. The pharmaceuticals market size is Rs. 70 Billion (US $ 1.2
Billion),
Asian and African regions with an expanding trade in the newly emerged Central
Asian States.
About a hundred million strong populations of the Central Asian States, with almost
no local
share of pharmaceutical industry in exports has been reached to 4.04% that was
3.28% in 2008.
So far as imports are concerned Pakistan imports nearly 95%of the basic raw-
material used for
manufacturing from countries such as China, India, Japan, U.K, Germany, and others
and major
Pakistan slipped from 13th to 15th and last place, out of the key markets assessed
in the Asia
2014. Growth over our longer, 10-year, forecast is likely to be somewhat more
subdued, at a
MAJOR SUPPLIERS
Major suppliers include United States, U.K., Germany, Switzerland, Japan, Holland
and France.
BASIC MANUFACTURES
There are five units operating in Pakistan for the Semi Basic Manufacturing of
pharmaceutical
raw material and still Pakistan has the capacity to absorb the significant
investment in this field.
Pakistan.
LOCAL MANUFACTURERS
REGISTERED DRUGS
47000
REGISTERED MOLECULES
1100
MARKET SHARE OF
45%
MULTINATIONAL COMPANIES
COMPANIES
MARKET LEADERS
Glaxosmithkline
The Pharmaceutical manufacture and trade in Pakistan is regulated through the Drug
Act 1976,
And the rules framed there under. This is a fairly comprehensive law. Pakistan was
the first
amongst the developing countries in the world to have introduced Good Manufacturing
Practices
Boards. The Quality Control system at the federal and provincial levels is
supported by the
Similarly, there are some special products e.g. immunological, anti-cancer drugs,
certain anti-
diabetics, antidotes and products manufactured from biotechnology, which are still
being
investment. Only few bulk pharmaceutical raw materials are being manufactured
locally and
most of the pharmaceutical raw materials are being imported in large quantities
from different
countries of the world. This sector also gives challenge to explore and avail the
opportunities.
Industry is not only playing a key role in promoting and sustaining development in
the vital field
of medicine within the country, but is also well set to take on the international
markets.
Association came into existence on January 26, 1961 and the Government of Pakistan
through
the Ministry of Commerce registered PPMA as the only Representative body of the
Section 26 of the Companies Act, 1913 on July 18, 1961. The Association was
formally
incorporated under the Companies Act, 1913 by the Registrar of Joint Stock
Companies.
MAIN OBJECTIVE
The main objective of Pakistan Pharmaceutical Manufactures’ Association is not
political. It is to
unit members in their common approach. Such as to encourage unity and mutual
understanding,
Association, establish just and equitable principles in trade and commerce etc.
MEMBERS
At the time of establishment of PPMA there were only ten members throughout the
country who
are the founder members of the PPMA and it was through their efforts that this
Association came
into being. Now, today the Membership of the Association is 210 (Approximately),
who possess
the license for manufacturing drugs granted by the Ministry of Health, Government
of Pakistan
We are proud of the hi-tech, essential and high quality National Pharmaceutical
Industry which
has significance for the country in term of self-reliance to a great extent. The
Pharmaceutical
industry Comprises around 411 manufacturing units including over 350 national or
Pakistani
known worldwide based Pharmaceutical Corporations. However, we treat all such units
as our
national because all the people who work in this industry are all Pakistanis. PPMA
feels strongly
about the fact that all its members possess all requisite facilities necessary for
the production of
HEAD OFFICE
PPMA has its head office located at KARACHI with two Regional offices in Punjab &
NWFP.
ROLE OF GOVERNMENT
pricing authority. In Pakistan the Ministry of Industries decides about the drug
pricing. In
Biotechnology plant worth Rs400 million to meet the growing needs of quality
medicines in the
country.
the standing of Pharmaceutical Industry with to ensure public welfare. Some major
public sectors
programs have been initiated to address the health care needs of the population
such as:
• The National Program for Family Planning and Primary Health Care.
The public sector health development expenditure increased from Rs.4.3BN in 2003-04
to Rs.6
BN in 2004-05, and Rs.9.5 BN in 2005-06. Ministry of commerce has given 50% subsidy
to
export from 1998-2003. The government has also formed a policy recently allowing
companies
FACT: Health care spending in Pakistan in 2009 is Rs.226.5 BN. GDP has been
allocated for the
1.1. LOCATION
The premises shall be located preferably in an industrial area and in any case not
in any
1.2. SURROUNDINGS
materials or products. It shall be away from filthy surroundings and shall not be
adjacent to an
“Highnoon for healthier nation”
12
open sewerage, drain public lavatory or any factory which produces a disagreeable
or obnoxious
odor or fumes or large quantities of soot, dust or smoke which may contaminate the
drugs being
manufactured or adversely affect their quality. Existing units shall keep the
surroundings under
1.3. - The size of the plot shall not be less than 2000 square yards.
The building shall be of adequate size and suitable design and construction in view
of the need
for drugs to be manufactured and to suit the operations to be carried out. The site
and layout plan
of building shall be got approved from the Central Licensing Board or person
authorized by it in
this behalf before starting construction of the building and any minor subsequent
changes in the
layout plan will be communicated as and when made with a revised updated layout
plan at the
pharmaceutical unit:-
Schedule-B, under the Drugs (Licensing, Registering and Advertising) Rules, 1976.
the layout
plan may be drawn to comply with the Good Manufacturing Practices as laid down
under the
aforesaid rules.
(ii) Give Schedule of Section wise covered areas.
(iv) Fee @ of Rs. 1000/- per section as may be proposed in the layout plan to be
deposited under the following head of account and submit original Chelan
C028-Social Services.
C02841-Health-Other Receipts.
(v) A list of the drugs intended to be manufactured, indicating the dosage forms
and the generic
under the Drugs Act, 1976. This Board, which comprises 21 experts in the field,
before
registering a drug, satisfies itself of its safety, efficacy, quality and economy.
The Board also
Form-5 under the Drugs (Licensing, Registering and Advertising) Rules, 1976. An
application
manufacturer abroad.
applications for branded generic drugs and 6-12 months in respect of new molecules.
3. Once the application is complete and has been evaluated it is placed before
the Registration
application. Once an application for renewal has been made in time, the
registration continues to
a committee on Veterinary Drugs for furnishing opinion after drug's evaluation. The
Registration
HIGHNOON LABORATORIES
HISTORICAL BACKGROUND
strategic analysis of this distinctive company and to compare its strategic march
with industry
trend. Highnoon was incorporated in 1984 in the historical and culturally rich city
of Lahore
setter and leading company in the industry right from its initiation up till now.
The organizational
creativity. Employees can take appropriate decisions and implement these with
conviction. This
research & development and production. Highnoon continues on its path to discovery,
scaling
new heights and seeking new and higher challenges which are essence of
pharmaceutical
industry.
STRATEGIC INTENT
and stand true to our conviction and promise to work for the betterment and
prosperity of our
people.
MISSION STATEMENT
OBJECTIVES
• Gain confidence of Doctors, Pharmacists and Consumer who use their products.
Pharmaceuticals are the substances that are aimed to treat, cure, prevent or
recognize diseases
and relieve pains through their applications. Research and discovery are the
essence of
pharmaceutical industry, and its success has played a vital role in maintaining
pre-eminent
position of the pharmaceutical industry in the world today. Such activities demand
a sustain rate
LANDMARKS
1985: Highnoon Laboratory started marketing of its first brand ULSANIC 500 mg
tablets, a
product of Chugai-Japan.
product of Tanabe-Japan.
1986: Construction of a new modern manufacturing facility on a 202, 500 sq. ft.
Area started at
17.5km Multan Road, Lahore. Total covered area of new facility is 108,064 sq. ft.
1990: new facility at present place started functioning and first batch of TRESS
ORIX FORTE
1996: Highnoon laboratory launch world’s latest ACE inhibitor brand TANATRIL
tablets of
Tanabe-Japan.
1996: Highnoon laboratory announced gratuity schemes along with already provided
staff
2002: Highnoon inaugurated a separate anti biotic facility on 7500 sq. ft. covered
area.
insurance plans for its employees and there immediate family members.
time.
2003: ICAP and ICMAP awarded highnoon’s annual report-2002 the fifth best corporate
report
in related sectors.
2004: Highnoon successfully negotiated acquisition of brand titled TRES ONIX FORTE.
2004: DYNALOG Service (Pvt) Ltd, wholly owned subsidiary of highnoon laboratories
Ltd
established and start working with the paid up capital of Rs. 20million for the
distribution and
marketing of highnoon as well as for the other local and international companies
products.
2008: Asthma and COPD portfolio that includes ROTACAPS and ROTAHALER, launched.
2009: ZOTTER 250 mg capsule for upper respiratory tract infections, launched.
2010: COMBIVAIR 100, 200, and 400 for asthma and COPD launched.
QUALITY POLICY
Highnoon is being seen as one of the most innovative aggressive and professional
marketing
outfits in the industry. This has been achieved through consistent toil and sweat
for quality that
has become a second name for them in the market.
SOCIAL RSPONSIBILITY
encompasses fine areas like promoting art and culture, valuing in sports,
supporting education
With the passion to serve the nation highnoon has been supporting Fatimid
Foundation, Care
Pharmacy, Old Ravian Union, Khoj Society Dispensary and Zoological Gardens of
Lahore.
Apart from serving the nation management of highnoon has establish a trust for
employees by
BUSINESS PARTNERS
FINANCIAL HEALTH
Their financial profile leaves them well positioned to pursue their corporate
strategy while
focus on core strengths and overall profitability. Diversity of their product range
enabled them to
fortify their position and the company generated sales revenue of Rs. 2.33 BN in
2009. This was
the highest in the company’s history growing at CAGR of 21%. The company
demonstrated
raw material and other cost due to weakness of our currency and inflationary
trends, by
maintaining higher volumes and lower operating cost. Their total assets of the
company have
risen to Rs. 1746 MN and the shareholders equity rose to 498 MN. The company
maintain
6.3%. Significantly, this growth was as much an outcome of effective life cycle
management of
the older product portfolio, as it was aggressive marketing of the newer brands.
The major
business segments for the company are alimentary tract & metabolism followed by
cardiology.
The rest includes systemic anti- infective, G.U system & sex Hormones, Nervous
systems,
PRODUCTION
Production of any medicine in the best form and quality is a very demanding process
it is their
mission to ensure that the equipment and machinery employed in the production
process are of
the top most quality. They are keeping this in mind that their manufacturing
facility is equipped
Production plant comprises of the most modern equipment from UK, USA, Germany,
France,
and Italy. Their qualified and highly skilled staff is fully cognizant with recent
developments in
procedures that assure highest standard of quality and manufacturing. In the field
of medicines
that is competitive yet challenging, the company keeps on introducing novel and
innovative
Blistering Strips 77
Cartonating Cartons 90
Their success depends on competent and productive R&D function. Being a leading
local
creativity and facilitates the accelerated development of new medicines to meet the
customer
needs their scientist are working hard to discover new ways of trading and
preventing diseases.
They are one of the largest collaborators in the local pharmaceutical industry and
work with
CONTRACT MANUFACTURING
capacity efficiently and caters well to the manufacturing needs of these marketing
concerns. In
“Highnoon for healthier nation”
26
2007 a toll manufacturing agreement was sign with OBS health care for contract
manufacturing
of one their products. This, no doubt, is yet another indicator of the esteem at
which the industry
etc.
EXPORT BUSINESS
With an aim to reach out to the world and provide the quality pharmaceutical
products at
To strengthen the export business they are planning to tab other potential regions
of the world. In
line with the company objectives, the export business will have significant share
in the overall
Hong Kong
Afghanistan
MACAU
UAE
Philippines
Sri Lanka
ORGANIZATIONAL WHEEL
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QUALITY
Stage 1
The Input Stage
• Pest Analysis
• SWOT
• Perceptual Mapping
Stage 2
The Matching Stage
• TOWS Matrix
Stage 3
The Decision Stage
Porters five Forces Model is used for industry analysis and it implies that risk
adjusted rates of
direction.
COMPETITIVE INTENSITY
the basis of quality, cost, product range and research and development.
cannot switch easily from one reliable product to the other. On the other hand
there are many
growth. There are chances of some new entrants but this threat is at moderate
level. It is not easy
THREAT OF SUBSTITUTES
company in Pakistan is making efforts for the betterment of their research and
development
IMPACT OF PROFITABILITY
Threat/Power
Bargaining power
of suppliers
Bargaining power
of costumers
Threat of new
Entrants
Threats from
substitutes
Moderate High
Low
Profits
COST LEADERSHIP
words, means the lowest cost of operation in the industry. The cost leadership is
often driven by
company efficiency, size, scale, scope and cumulative experience. A cost leadership
strategy
aims to exploit scale of production, well defined scope and other economies,
producing highly
COMPETITIVE INTENSITY
employees.
Highnoon laboratory has three to four suppliers at a same time. So they have better
insulation
from employees.
Due to high quality and reliable products highnoon laboratory is better positioned
and
in efficient manner that’s why they are in a better position to deter new entrants
in the market.
varying needs and interests of the customers on competitive and affordable prices.
Therefore
PEST ANALYSIS
PEST analysis is a useful tool for understanding the big picture of the environment
in which we
are operating, and the opportunities and threats that lie within it. By
understanding the
Specifically the PEST or PESTLE analysis is a useful tool for understanding risks
associated
with market growth or decline, and as such the position, potential and direction
for a business or
organization.
POLITICAL CHANGE
Political factors include government regulations and legal issues and define both
formal and
informal rules under which the firm must operate. Some examples include:
• Tax policy
• Employment laws
• Environmental regulations
• Political stability
NATURE OF CHANGE
pharmaceutical industry.
IMPACT OF CHANGE
THREAT
STRATEGIC RESPONSE
ECONOMIC CHANGE
Economic factors affect the purchasing power of potential customers and the firm's
cost of
• Economic growth
• Interest rates
• Exchange rates
• Inflation rate
NATURE OF CHANGE
industry of Pakistan because raw material such as molecules and supporting material
is imported.
IMPACT OF CHANGE
Inflation and exchange rate fluctuations expose a risk of increase in cost because
main cost
THREAT
STRATEGIC RESPONSE
threat.
SOCIAL CHANGE
Social factors include the demographic and cultural aspects of the external macro
environment.
These factors affect customer needs and the size of potential markets. Some social
factors
include:
• Health consciousness
• Age distribution
• Career attitudes
• Emphasis on safety
NATURE OF CHANGE
Supporting material is imported from India and China. So, cross border situations
of India and
Pakistan do matter. Terrorism and global alliance are also important factors
stimulating the
IMPACT OF CHANGE
Diseases are increasing day by day due to increase in population. Sales will be
reduced due to
cross border relationship and terrorism activities. Due to global alliance market
share increases.
THREAT
industry of Pakistan.
OPPORTUNITIES
STRATEGIC RESPONSE
strong research and product development. Unfavorable cross border relationships and
terrorism
activities can cause reduction in profits which can be control through building
strong business
TECHNOLOGICAL CHANGE
• R&D activity
• Automation
• Technology incentives
NATURE OF CHANGE
Technology is changing day by day. Pharmaceutical industry should acquire new and
advanced
IMPACT OF CHANGE
economies of scale.
OPPORTUNITY
competitive advantage.
STRATEGIC RESPONSE
Whenever new technology is evolved need for trained and skilled employees arise.
Either
Nature Impact
Strategic
Opportunities
Threats
of change of Change
response
Efficient Portfolio
Low profit Long
Term
Price Fixation
Management
Political Change margins
Cross border
Relationship Decrease in
Reduction in Strong Business
Social change
relationship
sales
profits
Terrorism
Increase in Growth
Focus on market
Global Alliances
market share opportunities
capitalization
Technological Change
Human
Advanced Economies of Competitive
resource &
Technology scale Advantage
Funds allocation
SWOT MATRIX
idea behind the SWOT model. To present the model in a more understandable way,
scholars
came up with so-called SWOT matrix. SWOT matrix is only a graphical representation
of the
SWOT framework.
Strengths Weaknesses
Opportunities Threats
conditions. The EFE matrix is a good tool to visualize and prioritize the
opportunities and
threats that a business is facing. The EFE matrix is very similar to the IFE
matrix. The major
difference between the EFE matrix and the IFE matrix is the type of factors that
are included in
the model. While the IFE matrix deals with internal factors, the EFE matrix is
concerned solely
OPPORTUNITIES
A molecule itself is the smallest particle of a substance that retains the chemical
and physical
properties of the substance and is composed of two or more atoms, a group of like
or different
as in LOPRIN the drug present is ASPARIN which is basically a molecule mostly used
as a pain
killer. In HILIN the drug is PREGABALIN which is a molecule used for Neuropathic
pain etc.
take the patents and copy rights of that molecule for a certain time periods as
Highnoon
They make research products for them. But they have opportunity to develop a
molecule so that
market for Veterinary products also. It needs a separate plant for production
therefore it requires
a huge investment.
GLOBAL ALLIANCE
Highnoon laboratory is having enough capacity for the production of medicines. They
are also
provide the raw material to them. Highnoon only produce those products for them.
They have
opportunity to explore for more market share globally through export opportunities.
RELATED PRODUCTS
THREATS
GOVERNMENT POLICIES
Ministry of health has the sole authority to manage the pharmaceutical industry in
Pakistan. They
are responsible to control the prices, drug registration, and company registration;
in short they
are controlling all the activities of pharmaceutical industry. They fix the prices
of products and
companies are not allowed to sell those products on above prices as prescribed by
the ministry of
health. They have to sell those products on that price even if the cost of that
product is more then
some products due to price fixation by ministry of health. But due to their
efficient portfolio they
cover their loss from other products. It’s an ultimate threat for them for a long
time.
Exchange rate fluctuation & inflation risk is also a long term threat for
pharmaceutical industry
in Pakistan it is because they import 95% of the raw material for their products
and if the prices
increase their cost increases. As far as Highnoon Laboratory is concern they are
also importing a
Cross border relationship and terrorism is also long term threat. They import huge
amount of raw
material from abroad if the Government ban on the trade from that particular
country due to any
“Highnoon for healthier nation”
45
reason they may suffer loss. Terrorism activities are also increasing day by day
which
EFE MATRIX
Score
1. Molecule development opportunity 0.05 2
0.1
2. Market potential for veterinary products 0.05 2
0.1
3. Market growth opportunities 0.2 4
0.8
4. Global alliances 0.1 4
0.4
5. Related products 0.05 2
0.1
Threats
1. Government policies 0.2 4
0.8
2. Exchange rate fluctuations 0.1 4
0.4
3. Inflation risk 0.1 3
0.3
4. Cross border relationship 0.05 2
0.1
5. Terrorism 0.1 4
0.4
Total Weighted Score 1
3.5
(1) Poor, (2) Below Average, (3) Above Average,
(4) Superior.
weaknesses in functional areas of a business. IFE matrix also provides a basis for
identifying and
evaluating relationships among those areas. The Internal Factor Evaluation matrix
or short IFE
matrix is used in strategy formulation. The IFE Matrix together with the EFE matrix
is a
STRENGTHS
In pharmaceutical industry the quality of products matters a lot because they are
directly related
to health of a human. As far as highnoon labs are concern they are maintaining that
quality of
product according to the ISO standard and also they are maintaining their standard
according to
international requirements. By doing this they obtain the license of research based
products.
manages its capacity efficiently and caters well to the manufacturing needs of
these marketing
concerns. In 2007 another toll manufacturing agreement was signed with OBS health
care
The 50% of revenue of highnoon labs comes from research based products. They have
taken the
patent and copy rights of highly advanced products from international business
partners to
capture market share for that particular product which cannot be produce by other
companies.
HUMAN RESOURCE
Efficient and skilled employees are a huge source for any organization and the main
factor which
contributes a lot is the loyalty of employees. In the case of highnoon labs the
employees are well
efficient, skilled and loyal towards their work which is the major strength of
highnoon
laboratories.
CONTINUOUS IMPROVEMENT
Highnoon Laboratory is improving day by day due to all the strengths illustrated
above. Their
revenue margin is increasing every year which shows their continuous improvement.
WEAKNESSES
DISTRIBUTION CHANNEL
Highnoon laboratory has its own distribution channel but it is not as strong as
other companies
SHORTAGE OF SPACE
There is no doubt that highnoon laboratory is managing their operations very well
but still there
UTILIZATION OF FUNDS
Highnoon laboratory is generating profits every year so they have enough potential
to explore
further markets instead of only utilizing those funds to acquire the patents and
copy rights of
Highnoon laboratory is producing so many products but still they need to produce
more products
such as they are already producing capsules, tablets, bottles, droppers, strips,
cartoons but they
Basically highnoon laboratory has all the departments and its integration and
coordination among
different setups of highnoon play a vital role to keep the wheel of businees
rolling. But still they
lack one department of Internal Control who possess a control over the working of
all the
departments.
IFE MATRIX
Score
1. Providing high quality products 0.2 4
0.8
2. Efficient capacity management 0.1 4
0.4
3. Patent & copy rights 0.1 3
0.3
4. Human resource 0.1 4
0.4
5. Continuous improvement 0.1 4
0.4
Internal Weaknesses
1. Distributional channel 0.1 2
0.2
2. Shortage of space 0.05 2
0.1
3. Utilization of funds 0.05 2
0.1
4. Lack of variety of products 0.05 2
0.1
5. Internal control system 0.15 2
0.3
Total Weighted Score 1
3.1
(1) Major Weakness, (2) Minor weakness, (3)
Minor Strength, (4) Major Strength.
“Highnoon for healthier nation”
50
matrix includes only the most important factors gathered from environmental
scanning and thus
Total 1 3.65
least two strategic variables. The size of circle shows the market share of
companies lying in that
circle. Close competitors fall in same circle. Circles which are close to each
other are also close
• Profit potential is same for all the companies lying in the same circle and
those who
• Driving forces are also almost the same for these companies.
Highnoon laboratory is providing high quality products and moderate product range
that’s why it
is close to CCL and SPL. CCL is offering high quality with low product range while
CCL is
GROUP MAP
Highnoon laboratory has moderate distribution channel along with high brand image.
CCL and
SPL are its close competitors having moderate and low distribution channel
respectively. Both
GROUP MAP
Highnoon Laboratory and CCL highly focusing on market penetration along with
moderate focus
on global expansion. SPL has moderate focus on market penetration and global
expansion.
GROUP MAP
or service, this map often used to help the organization to identify a positioning
strategy.
HIGH PRODUCT
QUALITY
Abbott
Highnoon CCL
SPL
Feroz
&
son
HEALTH
LOW PRODUCT
QUALITY
Highnoon laboratory have good repo in eyes of customer and investors because of its
high
major players of the industry. Competitive profile matrix shows the clear picture
to the firm
about their strong points and weak points relative to their competitors. The CPM
score is
weight remain same for every firm only rating varies. The best thing about CPM that
it includes
your firm and also facilitates to add other competitors make easier the comparative
analysis.
CPM includes both internal and external factors to evaluate overall position of the
firm with
respective to their major competitors. We have taken Searle Pakistan Ltd and CCL as
a
VERTICAL ANALYSIS
This figure shows that CCL is responding more to the mentioned critical success
factors as
responding more to these success factors as compare with Searle Pakistan Ltd. So,
highnoon
HORIZONTAL ANALYSIS
So far as each critical success factor is concern the response and position of
these three
companies is as follows
“Highnoon for healthier nation”
57
PRODUCT AVAILABILITY
Weighted Score of highnoon laboratories and CCL are 0.45 which is more than the
weighted
score of Searle Pakistan Ltd. So, the distribution channel of highnoon laboratory
and SPL is
CCL, Highnoon Laboratories, and SPL are maintaining product quality in same
passion. As they
are close competitors of each other they have same brand image.
PRODUCT RANGE
With reference to product range CCL bears strong position as compare with highnoon
laboratory
PRODUCT DEVELOPMENT
Highnoon laboratories and CCL are more competitive and insuring effeceint product
development
GLOBAL EXPANSION
CCL and SPL are more competitive than Highnoon laboratories in global expansion.
Highnoon
CUSTOMER LOYALTY
All of these three companies have equally loyal customers according to our
analysis.
MARKET PENETRATION
CCL has the ability to penetrate into the market where as highnoon laboratory and
SPL is still
CPM MATRIX
TOWS MATRIX
external threats and opportunities with the internal weaknesses and strengths of
the organization.
SO STRATEGY
ST STRATEGY
WO STRATEGY
WT STRATEGY
management and provide the high quality products to take the high market potential
for
veterinary and related products due to avail these opportunities obviously more
increase in sales.
Due to the efficient human recourse department of Highnonn increase the market
growth
opportunities.
By using the strengths like provide high quality products continuous increase in
sales and use the
patents and copy rights is to avoid the threats and Highnoon penetrate into other
markets and also
improve the cross border relationships. And overcome the weaknesses like to
increase the verity
of products and fair utilization of funds and develop the forward integration
like increase the
distribution channels and improve the shortage of space to create the different
SBU’s. Finally
minimize the weakness and avoid the threats to focus the government policies and
develop the
effective control system which helps to avoid the unfair transactions in Highnoon
laboratories.
TWOS MATRIX
IF Strengths
Weakness
E 1.Providing high quality products
1.Distribution Channel
EF 2.Efficient capacity management
3.Patent & copy rights
2.Shortage of space
E 4.Human Resource
5.Continuos Improvement
3.Utilization of funds
Opportunities SO Strategies
WO Strategies
Increase in sales (S1,
1.Molecule development opportunity S2, O2, O5)
2.Market potential for veterinary products
Develop forward integration &
3.Market growth opportunity Expand business in globally
SBU’s (W1, W2, W3, W4, O1,
4.Global alliance
O2, O3, O4, O5 )
5.Related Products
(S3, S5, O4)
Efficient Human Resource
department S4, O1, O3
Threats ST Strategies
WT Strategies
Penetrate in other Markets
Focus the government policies
1.Government policies
and develop the internal control
2.Exchange rate fluctuation (S1, S2, S4, S5, T2, T3, T4)
SPACE MATRIX
The SPACE matrix is a management tool used to analyze a company. It is used to
determine
what type of a strategy a company should undertake. The Strategic Position & Action
Evaluation
The SPACE matrix is broken down to four quadrants where each quadrant suggests a
different
• Aggressive
• Conservative
• Defensive
• Competitive
SPACE MATRIX
FS
Conservative +6 Aggressive
+5
+4
+3
+2
+1
CA IS
0
-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6
-1
-2
-3
-4
-5
-6 Competitive
Defensive
ES
This particular SPACE matrix tells us that our company should pursue an aggressive
strategy.
Our company has a strong competitive position in the market with rapid growth. It
needs to use
concentric diversification.
The SPACE Matrix analysis functions upon two internal and two external strategic
dimensions
There are many SPACE matrix factors under the internal strategic dimension. These
factors
company accounting. We used SPACE matrix factors such as shareholders’ equity, ease
of exit
and risk involved in business. We have used the following competitive advantage
factors market
The SPACE matrix calculates the importance of each of these dimensions and places
them on a
• By definition, the CA and IS values in the SPACE matrix are plotted on the X
axis.
The SPACE matrix is constructed by plotting calculated values for the competitive
advantage
(CA) and industry strength (IS) dimensions on the X axis. The Y axis is based on
the
The following figure shows what values were used to create the SPACE matrix
displayed above.
SPACE MATRIX
I -5 Demand
variability
Each factor within each strategic dimension is rated using appropriate rating
scale. Then
The BCG Matrix is based on the product life cycle theory that can be used to
determine what
matrix has two dimensions Relative market share and Industry growth rate. It means
the bigger a
firm has its relative market share or the faster the products market share grows
the better it is for
the company. Scales defined on relative market share is from 0.0 to 1.0in which
high indicates
1.0 medium is for 0.5 low is for 0.0 whereas scale define on industry growth rate
is from-20 to
+20 in which -20 indicates low 0 is for medium and high is for +20.
SUPPORTING CALCULATIONS
of 2.33BN. Gross Profits are 846MN which is 36.31% of its total revenues. Industry
sales growth
rate is 12%. Market share of highnoon laboratory is 6.3% while market leader
Glexosmith has
market share of 11.6%. Therefore relative market share of highnoon laboratory is
0.7. It implies
that highnoon laboratory lies in stars quadrant. They are using huge funds in order
to earn profits
there must be large cash flows in order to get market share otherwise the
results will be in cash
cow and then ultimately becomes a dog which is a worst situation for a
company.
BCG
MATRIX
High
Medium Low
1.0 0.9 0.8
0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0
In d u s t r y S a l e s G r o w t h R a t e
High +20
+15
Pr o
fi t
+10
+5
Stars
Question Marks
Medium 0
-5
-10
-15
Cows
Dogs
Low -20
“Highnoon for
healthier nation”
69
based on an analysis of internal and external business factors which are combined
into one
suggestive model. The IE matrix is a continuation of the EFE matrix and IFE matrix
models.
1. Score from the EFE matrix this score is plotted on the y-axis
We calculated IFE matrix for highnoon laboratory. The total weighted score is 3.1
which point
the company with an above average internal strength. We have also calculated the
EFE matrix
for the same company. The total weighted score EFE matrix is 3.5 which indicates
high ability to
respond to external factors. These values are plotted on IE matrix. This IE matrix
tells us that our
Weak IFE
Strong Average
4.0 3.0 2.0 1.0
High
3.0
Medium
2.0
Low
1.0
EFE
GRAND STRATEGYMATRIX
The model defines the situation of a company through the market growth and their
competitive
position in the market. There are four quadrants that the company can be
categorized such as:
QUADRANT 1
Quadrant I indicates that the company is in rapid market growth and strong
competitive position.
• Market development
• Market penetration
• Product development
• Forward integration
• Backward integration
• Horizontal integration
• Concentric diversification
QUADRANT 2
Quadrant II indicates that the company is in rapid market growth and weak
competitive position. F
Company needs to evaluate their present approach to the market and identify why the
current strategy
is not effective. The company will then adopt the grand strategy options
accordingly.
• Market development
• Market penetration
• Product development
• Horizontal integration
• Divestiture
• Liquidation
QUADRANT 3
Quadrant III indicates that the company is in slow market growth and weak
competitive position.
Company should decrease resources used by the particular business. Another way is
that company
• Retrenchment
• Concentric diversification
• Horizontal diversification
• Conglomerate diversification
• Liquidation
QUADRANT 4
Quadrant IV indicates that the company is in slow market growth and strong
competitive
position. Company has excellent position and can choose to diversify into more
highly profitable
areas.
• Concentric diversification
• Horizontal diversification
• Conglomerate diversification
• Joint ventures
The model allows better implementation of strategy because of the intensified focus
and
However, it may not be as simple as it seems, upon application to real life due to
the unforeseen
factors and also complications in the business world. In addition, the relationship
between
GRAND MATRIX
Quadrant - 2 Quadrant - 1
1. Market development 1. Market development
2. Market penetration 2. Market penetration
3. Product development
3. Product development
4. Horizontal integration 4. Forward integration
5. Backward integration
5. Divestiture 6. Horizontal integration
6. Liquidation
WEAK 7. Concentric diversification
STRONG
COMPETITIVE
COMPETITIVE
POSITION Quadrant - 4
POSITION
Quadrant - 3
provides an analytical method for comparing feasible alternative actions. The QSPM
When company executives think about what to do, and which way to go, they usually
have a
prioritized list of strategies. If they like one strategy over another one, they
move it up on the list.
This process is very much intuitive and subjective. The QSPM method introduces some
numbers
the best strategy using input from other management techniques and some easy
computations. In
other words, the QSPM method uses inputs from stage 1 analyses, matches them with
results
from stage 2 analyses, and then decides objectively among alternative strategies.
HIGHNOON LABORATORY
BLOCK 1
Firstly we have taken key success factors from EFE & IFE matrices and gave them
same weights
as in EFE & IFE matrix. This QSPM compares three alternative strategies such as
market
same block. So far as our analysis is concerned we suggest that product development
is most
development strategies.
AS TAS AS TAS AS
TAS
Strengths
Weaknesses
Opportunities
Threats
4.5 4.6
5.5
BLOCK 2
the QSPM backward integration is most feasible strategy for highnoon laboratory
because its
integration.
AS TAS AS TAS AS
TAS
Strengths
Weaknesses
Opportunities
Threats
relationship
3.45 3.6
3.3
We have chosen product development from block one and backward integration from
block 2.
focusing on a single product. So, with the help of analytical procedure and
experience of the
suggest them to adopt product development strategy for further enhancement and
betterment in
existing products or developing new ones resulting in increased sales. They are
using resource
based model by focusing on core competencies that are considerably valuable, rare,
costly to
imitate and well organized. Highnoon is a sign of well organized and formal
organization.
APPENDIX
Anti dotes
Anti diabetic
Backward integration
Biotechnology
Biotechnology is a field of applied biology that involves the use of living things
in engineering,
CAGR
Compound Annual Growth Rate means the year-over-year growth rate of an investment
over a
CGMP
CCL
major players of the industry. Competitive profile matrix shows the clear picture
to the firm
about their strong points and weak points relative to their competitors. The CPM
score is
weight remain same for every firm only rating varies. The best thing about CPM that
it includes
your firm and also facilitates to add other competitors make easier the comparative
analysis.
Concentric Diversification
A growth strategy in which a company seeks to develop by adding new products, also
called
Encapsulation
molecule.
“Highnoon for healthier nation”
83
Forward integration
Five Forces model of Michael Porter is a very elaborate concept for evaluating
company's
This is also an important matrix of strategy formulation frame work. Grand strategy
matrix it is
Horizontal integration
Absorption into a single firm of several firms involved in the same level of
production and
major strengths and weaknesses in functional areas of a business. IFE matrix also
provides a
basis for identifying and evaluating relationships among those areas. The Internal
Factor
Immunological
Immunology is a broad branch of biomedical science that covers the study of all
aspects of the
Landmarks
Molecule
Market development
The process of finding new markets for products a company is already making.
Market penetration
Product development
Perceptual mapping
PEST analysis
PEST analysis stands for "Political, Economic, Social, and Technological analysis"
and describes
strategic management.
provides an analytical method for comparing feasible alternative actions. The QSPM
SWOT analysis
SWOT analysis uses so-called SWOT matrix to assess both internal and external
aspects of
doing your business. The SWOT framework is a tool for auditing an organization and
its
environment.
Strategic intent
its vision.
Stockholders
Normally stockholders are within the company and may include internal clients,
management ,
Substitute products
Two goods are substitutes in demand if, when the market price of the first good
raises, the price
SFAS Matrix
SFAS Matrix is a list of company’s external and internal strategic factors in one
table and SFAS
matrix includes only the most important factors gathered from environmental
scanning and thus
based on an analysis of internal and external business factors which are combined
into one
suggestive model.
“Highnoon for healthier nation”
87
what type of a strategy a company should undertake. The Strategic Position & ACtion
The BCG matrix or also called BCG model relates to marketing. The BCG model is a
well-
known portfolio management tool used in product life cycle theory. BCG matrix is
often used to
prioritize which products within company product mix get more funding and
attention.
PPMA
provides an analytical method for comparing feasible alternative actions. The QSPM
Therapeutics
TOWS matrix
TOWS matrix: Uses a SWOT analysis to develop strategies by matching strengths with
Veterinary products
REFERENCES
Mr. Jawad Naeem , “Marketing manager: Highnoon laboratories limited Lahore ”, 2010
Lahore ” 2010