Executive Summary

Pharmaceutical industry is one of the prominent sectors in Bangladesh. There are many

key players like Beximco Pharmaceuticals, Square Pharmaceuticals, Incepta Pharmaceuticals,

Reneta Pharmaceuticals, and Popular Pharmaceuticals who are selling the medicine locally and

also exporting internationally. This report is going to focus on Beximco Pharmaceuticals to

expand its business in Brazil. As a country, Brazil has huge demand of medicine so Beximco can

setup profitable business there easily. Before expanding business in any country, a company

should follow some analysis to get the idea about the market. By following this, we have

analyzed the current SWOT of Beximco, BCG matrix, Porter’s 5 forces model, PESTLE analysis

to match the market requirements with company’s competitiveness and resoucres. After doing all

the analysis we have suggested an entry mode strategy which is Joint Venture. The joint venture

between Brazil’s local medicine companies named Biolab Sanus Farmacêutica. Aside this we

have also suggested market competitive strategy based on Porter’s generic strategies.

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Introduction
Expanding in a new market is bit challenging for every company because there are many

factors that need to be considered before entering in a new market. A great company always does

the market research before taking decision to enter in a new country or market because every

country has unique culture, purchase pattern of customers and economical situation. Every

critical factor should be analyzed to understand the market trend and culture to satisfy the

customers of new market.

This report is going to introduce Beximco Pharmaceuticals in Brazil which is one of the

popular pharmaceutical companies in Bangladesh. The reason behind choosing Brazil is

opportunity to do the business there in pharmaceutical industry. The pharmaceutical industry of

Brazil is very much potential for expansion which will be discussed all over the report.

1.1About Beximco Pharmaceuticals

Beximco Pharmaceuticals Ltd (BPL) is one of the leading manufacturers of medicine and

medicine ingredients in Bangladesh. The company is one of largest exporter from Bangladesh

having many international certifications to export medicine outside of the country. This company

is selling medicine to many middle-easts, European countries. This company has the portfolio of

500 types of medicines in different size which include antibiotics, antihypertensives,

antidiabetics, antiretroviral, anti asthma inhalers etc, among many others.

The company has now 3000 employees and they are successfully maintaining the quality

production in their 2 factories. The company has strong moral and ethics to follow in production

and they also make their employees to believe their ecosystem (Beximco Pharma, 2014).

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1.1.1Mission

“We are committed to enhancing human health and well-being by providing contemporary and

affordable medicines, manufactured in full compliance with global quality standards. We

continually strive to improve our core capabilities to address the unmet medical needs of the

patients and to deliver outstanding results for our shareholders” (Beximco Pharma, 2014).

1.1.2 Vision

“We will be one of the most trusted, admired and successful pharmaceutical companies in the

region with a focus on strengthening research and development capabilities, creating partnerships

and building presence across the globe” (Beximco Pharma, 2014).

1.2 Current Strategies of Beximco Pharma for Selling Products

Currently, Beximco has great production capacity so they are producing a good amount

of medicine to sell locally. After meeting the local need they are also selling their product in the

international market as well.

1.3 About Industry (Brazil & Bangladesh Both)

Brazil is a country of 209 million populations where pharmaceutical industry has not

grown that much and they are highly dependent on imported medicine. They have still gap in

some medicine like, diabetes, mental health disorders, Osteoporosis, Cardiovascular disease,

Epilepsy, Rheumatoid arthritis, Multiple sclerosis, Ophthalmology. So Beximco has huge

opportunity to expand their business in Brazil (The Pharma Letter, 2017).

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 On the other hand, pharmaceutical is considered as one of the promising sectors of

Bangladesh. Currently, this sector is getting a good amount of growth. It is second largest

contributor to government income by paying tax. Now, Bangladesh can meet up its 95%

medicine demand by local products and rest of 5% is imported from other countries like cancer

drugs and some other vaccines. There are some market leaders who are dominating the local

market and exporting as well. Beximco is one of the largest pharmaceuticals company in

Bangladesh which is global recognition for the medicine quality.

2. Analysis of the Company & Industry

2.1 SWOT analysis of Beximco Pharma

2.1.1 Strengths

 Strong Brand Image: As a company Beximco Pharma is well trusted all over the world

because it is already exporting its products in many developed countries.

 Strong Financing Power: The Company has billion dollars to invest outside the country

to expand its business. So financial strength is one of the key factors that will help

Beximco to expand in Brazil.

 Expert Employees: They have strong highly professional team who can train their Brazil

based employees easily to work in the market with efficiency.

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  Certified by Global Regulatory Bodies: They have already accreditation for state of the

art manufacturing facilities by many countries including Brazil.

 Strong R& D: Beximco has strong R&D team that can improve the medicine quality

consistently by doing more research.

2.1.2 Weakness

 Weak Supply Chain: Though Beximco is a great company but still they will face supply

chain issue initially in Brazil.

 Loan Defaulter: Beximco group has bad reputation for loan default in Bangladesh so

this can have an impact on Brazil government as well.

2.1.3 Opportunities

 Untapped Market of Pharmaceutical: Brazil has still dependency on other country

based pharmaceutical companies to import medicine and vaccine. So there is an

opportunity for Beximco to invest directly to Brazil.

 Government Encouragement for International Investment: Brazil government is now

giving support to foreign companies to invest in their countries directly by collaborating

with their local companies.

2.1.4 Threat

 Strong Competitor: Beximco will face a strong competitor like Sanofi in Brazil. Sanofi

has a great amount of market share in Brazil market and they are doing very well in that

market.

 New Entrant: Since, Brazil government is encouraging foreign investment and the

pharmaceutical market is not that much saturated so any new competitor can enter in

Brazil market easily (Faizul, 2017).

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2.2 Porter’s Five Forces

Thereat of New Entrants

In Brazil, the pharmaceutical industry is booming and the government is also

encouraging the new companies to enter in the market because they have few local

pharmaceutical companies in the country. So the threat of new entrant is high in Brazil.

Bargaining Power of Suppliers

Since, Beximco is a established company so it has some permanent and regular suppliers

of raw materials. Though supplier has bargaining power but the company has good relationship

with the suppliers. So supplier won’t charge high Bexico for raw materials or supplies.

Bargaining power of supplier is low here.

Bargaining Power of Buyer

In Brazil, bargaining power of the customer/buyer is high and switching cost is low

because competitors are offering the same priced medicine. So here bargaining power of the

buyer is high.

Threat of Substitute

Medicine is a very sensitive thing. So there is no substitute for the medicine to overcome

diseases. Here Beximco will not face threat of substitute.

Rivalry of Competitors

In Brazil, already there is GSK and Sanofi is leading the market. They are bit aggressive

there but still not being able to serve the whole market. So Beximco will face hard competition in

Brazil. So Beximco will have to create a strong position instantly after entering in the market.

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3. Analysis to Expand Business in Brazil

Since, we have chosen Brazil as our preferred country for expansion so there is some

analysis that should be done before entering in the market. PESTEL, SWOT (Brazil Based) these

2 analyses can draw a clear picture for Beximco to enter in the market with right direction. So

the analysis is started with the PESTEL analysis:

3.1 PESTEL Analysis

PESTEL stands for “political”, “environmental”, “social”, “technological”, “economical”

and “legal”. This is very much popular in strategic management section because it gives the

overview of microenvironment of a country. So most of the companies do follow this analysis

whenever they think about to enter in a new country to do business. The PESTEL analysis of

Brazil is discussed below:

3.1.1 Political factor:

Brazil has political stability and the government is stable right now. The government of

Brazil is running the country very smoothly. But this steadiness can be changed over night

because the modern history of Brazil indicates things can change overnight, especially during

elections, as the political situation tends to heat up a great deal (In Depth Study of BRAZIL

Country, 2013).

But as a country Brazil is highly affected by corruption and this is one of the disturbing

facts that is hampering the growth of Brazil in some extent. Even if you want to open a small

business in Brazil then you must have to give bribe to the government officials and other

connecting parties which are very much reluctant. According survey report of Transparency

International mentioned that Brazil is ranked 72nd out of 180 countries in corruption. This rate is

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higher than Turkey and Bulgaria as well (PEST Analysis of Brazil: High Potential for Growth,

2014).

3.1.2 Economic Factors:

In Latin America, Brazil GDP is highest in amount and PPP (Purchasing Power Parity) is

best among others as well. The economy is boosted by large and developed agricultural, mining,

manufacturing, and service sectors. Aside this, they have a large labour pool due to their large

amount of population. The GDP growth rate is increasing by 1% from last 3 years and the

country has been going beyond national border and entering in the international commodities

market. Beside this, Brazil is part of the group of four emerging economies named BRIC. A

report of World Bank has revealed that, Brazil has the ninth largest economy in the world based

on PPP and 10th largest economy based on exchange rate (PEST Analysis of Brazil: High

Potential for Growth, 2014).

3.1.3 Socio cultural Factors:

Social inequality is present in Brazil. 20% of the population is poor and rests of the

people are belonging from middle class and upper class. This country has cultural diversity due

to Portuguese dominance in old days. Therefore, they are up to date with the fashion world and

most of the people belong from Christian religion. This is the country of open society where

freedom has got highly priority (Castaño et al, 2014).

On the other hand, crime rate is high in Brazil and most of the life threatening crime

happens due to alcohol or drugs. Child mortality rate is moderate in Brazil and they have

improved over the years as well (PEST Analysis of Brazil: High Potential for Growth, 2014).

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3.1.4 Technological Factors:

In technology, Brazil is lag behind from its neighboring countries like Canda, Mexico.

But government now has given emphasize on the technology and started investing on technology

as well (PEST Analysis of Brazil: High Potential for Growth, 2014).

3.1.5 Environmental Analysis:

Brazil’s Department of Environmental Affairs is aiming to create a sustainable and

prosperous society. Brazil is home to one-sixth of the world's marine species with the Indian

Ocean on the east coast and the Atlantic on the west coast. The country has more species of wild

animals than Europe and Asia put together and a vast variety of endemic and migratory birds.

Brazil government is very much concerned about environmental safety so there are many laws

and regulations for the industries to follow and they do have strong laws against environmental

pollution or policy violation.

The federal agencies IBAMA and ICMBio are also well established and active in

enforcement. Some state agencies are still dependent on public prosecutors and NGOs to initiate

their enforcement of environmental laws within their respective territories, but enforcement has

been gradually improving. There are several public actions that can be brought by environmental

authorities, public attorneys and non-NGOs to claim against non-fulfilment of environmental

obligations (Gonçalves et. al, 2012).

3.1.6 Legal Environment:

Brazil has a mixed and hybrid legal system that was being created to make a business

friendly environment. They inherited the common laws from British and customary law from the

North America. Though the country has high corruption rate, anybody can get rid off from

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punishment by paying bribe to the law enforcement parties (PEST Analysis of Brazil: High

Potential for Growth, 2014).

For pharmaceutical industry, Brazil has strong restrictions on advertisement of medicine

or vaccine. So no company can promote their medicine or vaccine in Brazil publicly.

3.2 Summary of PESTLE analysis on Brazil

Factors Name Facts

Political  Stable political situation.

 Situation can be changed before election.

 Corruption rate is so high

Economical  1% increasing every year.

 9th largest economy based on PPP

Socio-cultural  Cultural diversity.

 Christian is the primary religion.

 20% population is poor.

 Crime rate is high.

Technological  Not that much advanced in technology
Environmental  Strong law for environmental policy violation.

 Govt. is careful about government to ensure environmental

sustainability.
Legal  Mixed and Hybrid Legal system.

 Advertisements of pharmaceutical products are strongly

prohibited.

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3.3 BCG Matrix

Cash Cow: Cash Cow is the most stable and money flowing products of the company. Napa

falls under Cash Cow category because this medicine sells highest and they are generating a

great amount of revenue for the company.

Stars: Tofen, Azmason, Neoceptin these medicine are the star mark because these medicines

have a great amount of growth in the marketing and making good amount of money for the

company.

Question Mark: There are various types of antibiotic medicines which can be fall under

question mark. These product have great growth but small market share.

Dogs: Since pharmaceutical industry is an experimental industry. So there are many

experimental medicines that can be fall under this stage.

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4. Steps of Going Global
4.1 Entry Mode in Brazil

The Brazil government does not impose any strict law against foreign investment so

Beximco can take this advantage and go for Joint Venture with a mid ranged local

Pharmaceutical company to expand its business directly in Brazil.

The preferred company for Joint Venture is Biolab Sanus Farmacêutica which is ranked in

top twenty pharmaceutical companies in Brazil. The reason behind choosing Joint Venture

Strategy is given below:

 Easy to enter: Joint venture is the easiest way to enter in a new market because the local

company can help the new company to expand with business with its own resources.

 Legal Facilities: Since, legal company is going to get half of the ownership so legal

complications will be handled by the local company which will reduce the hassle of the

foreign company to manage the legal papers.

 Fast Movement: Brazil has various complexities in establishing business and it take time

to get all the permission to do the business. A local partner can help to complete the

process fast.

 Established Supply Chain: As a pharmaceutical company Biolab Sanus Farmacêutica

has already a strong supply chain in the market so Beximco can utilize this to supply its

newly introduced medicine.

 Income and Asset Review: In joint venture business each partner can review its income

individually and control its invested assets as well (CMS, 2017).

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4.2 The Reason Behind Choosing Biolab Sanus Farmacêutica as Partner

Company

Biolab Sanus Farmacêutica is one of the Brazil based old pharmaceutical and medical

service provider company which was established in 1997. Currently, the company has more than

100 products and 2500 employees and 25000 doctor visits. Currently, the company is also

exporting medicine in Canada and USA by setting up office (About - Biolab Sanus

Farmacêutica, 2014).

Since Biolab Sanus Farmacêutica is not in the market leader position like top 5 so this

joint venture will help them to increase the product number and invest on R&D to introduce new

medicines in the Brazilian market. This joint venture will help this company to increase its

investment as well.

4.3 Porter’s Generic Strategy for Market

Before entering in a market, a company must have to assess the market set target market.

Porter’s Generic Strategy helps a company to understand its market and then focus on the area so

that the target customers stay happy and satisfied with the company offerings. A good strategy

helps a company to stay competitive in the market.

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 We can see there are four strategies that can be used by a company to stay competitive in

the market. These four strategies need to be discussed in brief before choosing the perfect

strategy for Beximco Pharma in alliance with Biolab Sanus Farmacêutica. So the discussion of

each strategy is mentioned below:

Differentiation Strategy: Differentiation strategy is created by some aspects of the business like

service/product quality, innovativeness, strong brand image, premiumness, strong supply chain

etc, which must be difficult for competitors to implement. A firm implements differentiation

strategy to stay competitive and sustain. For achieving this, companies tend to focus on strong

marketing and promotion by illustrating benefits in front of customers to make them loyal. Most

of the cases companies provide unique products or services to for differentiation (SIMON,

2012).

Cost Leadership Strategy: In this strategy, companies try to maximize profit by reducing

operational cost or increasing sales by offering low cost products in the market. Cost Leaders

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actually try to become the market leader by offering quality products/service in low price among

the competitors so that customers stay long time with the company (SIMON, 2012).

Focus Strategy: In the focus strategy, a company gives focus on a specific market or small

market to sell the product/service (Davidson, 2001). The firm can give focus on a specific area,

region, and demographics or need to sell the product/service (McCracken, 2002). Generally, it is

a technique to serve the niche market. Most of the premium product brands use this strategy. For

Example: Ferrari is following focus differentiation strategy because there are very few customers

who can afford Ferrari.

4.3.1 Strategy For Beximco Pharmaceuticals

The best strategy for Beximco will be following the Cost Leadership Strategy to compete

in the market. The reason for choosing this strategy is mentioned below:

 Since Beximco is going to do the joint venture company with a local company which will

give an advantage of cost reduction in operation and supply chain. So Beximco can easily

offer the best medicine in low cost in the Brazilian market.

 Another reason is the competition. Though the Brazil pharmaceutical market is highly

depended on import for various medicines so local production can help to grab more

market share. If Beximco can offer quality medicines in low cost then the market share

can be grabbed easily by Beximco.

4.4 Risk Factors

Investing in a new country is very much risky because a great amount of financing is

needed to enter and build a new market. There will be some key risks that can be faced by

Beximco and those are:

 Intensive competition from Sanofi, GSK and other strong competitors.

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  Government can change their regulations for foreign companies any time.

 Employee Strike due to changing company policy or culture for bringing more profit for

the company.

4.5 Contingency Plan

 Partnered with Healthcare Associations to Increase Brand Awareness: Since,

Beximco’s joint venture will be new in Brazilian market so they will need more brand

awareness to overcome competition. Association with various healthcare organizations

will help Beximco’s new joint venture to increase brand awareness in Brazilian market.

 Investment in Social Welfare: Whenever a company invest in social welfare of a

country then government give those companies tax rebate and other facilities. So

Beximco can invest in Brazil’s social welfare work like Anti HIV campaign and all to get

support from government. If the government change the policy for foreign companies

then Beximco will be able to take some advantages for its impactful work.

 Employee based culture: Since beximco will have new operation there in partnership

with Biolab Sanus Farmacêutica (local Brazilian pharmaceutical company). So they can

introduce training program to train the employees that will go from Bangladesh to adjust

with the Brazilian culture to avoid any kind of mistake.

5. Conclusion

5.1 Recommendations

Expanding business in a new country is not that much easy because every market has some

uniqueness that needs to be identified first before entering in that market. Since, Beximco is a big

company so it can take the advantage market potential by landing in the Brazilian market. Sanofi

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and Pizfer is the market leader in Brazil where local companies like Biolab Sanus Farmacêutica

is not in the top position due to resources and investments. So Beximco and Biolab Sanus

Farmacêutica can do great together in the Brazilian market. But Beximco must have to take care

of Brazil’s culture and norm to understand the market trend. Aside this, joint venture partnership

will be the best strategy for entering the Brazilian market because it will reduce their financial

and market enter risk in many cases. For dominating the market, cost leadership strategy will be

the best strategy for Beximco.

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