School of Business

Independent University, Bangladesh

“Report paper on Beximco Pharmaceuticals”

Course – MGT201: Principles of Management

Section- 1

Submitted to: Submitted by:

Ms. Farzana Chowdhury Rabeya Khan (1810477)

Lecturer, Department of Management
School of Business Nusrat Farhana Khan Farin (1910754)

Raffay Samdan (1921915)

Asif Hossen (1930549)

Zarin Tasnim (1930056)

Date of Submission – 14.09.2020

Table of Contents

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 1. Research Methods, Executive
Summary.................................................................................3
2. Introduction..........................................................................................................................4
3. SPECIFIC AND GENERAL EXTERNAL ENVIRONMENTAL FACTORS……………………………….5-6
4. Key Points…………………………………………………………………………………………………………………….7
5. Financial Performance………………………………………………………………………………………………....8
6. SWAT Analysis……………………………………………………………………………………………………………...9
(Strengths, Weaknesses, Opportunities) ……………………………………………………………………...9
(Threats, Bottom, line) ………………………………………………………………………………………………..10
7. Beximco Pharmaceutical LTD. Competitive Advantage…………………………………………...11-12
(Conclusion, References) ..................................................................................................12

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 Research Methods

Our group members have divided the report task between us. We have used different
websites, articles sources for this research.

Executive Summary

The report is based on strategic management practice at Beximco Pharmaceuticals Ltd.

The purpose of this report is to understand how Beximco Pharma formulate their overall
business strategy and task they have done to implement their selected strategy. At the
beginning of the report, we given an overview of Beximco Pharma. Then we have
identified the specific and general external environmental factors and explained how
Beximco Pharma affected or influenced by these factors. We have discussed in detail
about how COVID-19 pandemic has affected the company. After that we perform a
SWOT analysis to identify the strengths, weakness, opportunities, and threats. Based on
this we identified Beximco Pharma’s competitive advantage and viewed how they utilize
their advantages. According to this research we identify Beximco Pharma’s overall
business strategy and find out how they implement their strategy. At the end of the
report, we give some recommendation based on our findings.

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 Introduction

Beximco Pharmaceuticals Limited belongs to Beximco Group of Industries. Beximco

group is one of the largest private sector groups in Bangladesh. Beximco was founded in
1972 by two brothers - Ahmed Sohail Fasiur Rahman and Ahmed Salman Fazlur Rahman.
Beximeo Pharmaceuticals Ltd. was founded in 1976 and started their action from
1980.Today Beximco is one of the most known names in the country's business arena.
Beximco's philosophy is simple: In identifying opportunities, it has targeted those
industries which the country needs most to progress and to improve living standards.
Beximco is also focused on those industries, which make the most of Bangladesh's
Competitive Advantages in the international market. Beximco's shares constitute 5.72%
of the market capitalization of Dhaka Stock Exchange. Beximco's industrial businesses
include jute, textiles, basic chemicals, ceramics, pharmaceuticals, and marine foods.
Beximco's non-industrial undertakings are focused on real estate and construction,
engineering, media, information technology, trading, and financial services. Beximco has
maintained its leadership position with the consistent growth over the year.

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 SPECIFIC AND GENERAL EXTERNAL ENVIRONMENTAL FACTORS
AFFECT OR INFLUENCE BEXIMCO PHARMACEUTICALS:

External environment is composed of all the outside factors that impact the operation of
business or organization. The organization has no control over how the external environment
part will shape up the organization. There are some factors like political factor, economic
factor, demographic, technological, social cultural factor, environmental factor. All these factors
add its own contribution to the overall decision taken by BEXIMCO PHARMACEUTICALS.

1. Political factor: The political factor refers to BEXIMCO-government relationship and the
overall political situation of a country. There is political instability present in Bangladesh
which plays significant role in Beximco pharmaceuticals. Environmental regulations of
Bangladesh government contribute deeply on the flourish and limitation of Beximco.
The Labour laws of Bangladesh allow and inhibit the organization’s operation. The tax
policies of Bangladesh controls invest.

2. Economic factor: Factors such as inflation rate, foreign exchange rate, GNP,
unemployment rate affects economic factor. Beximco Pharmaceuticals can use
country’s economic factor. A potential rise in inflation rates would mean that the cost of
raw materials would increase thus decreasing the profit margin of Beximco
pharmaceuticals. Change in interest rate is potential. Business can be directly affected
by change in interest rate. It also affects individuals who are customers. If we consider
the status of change in GNP, we can see it’s also a potential factor. The GDP growth in
the country will affect how fast is expected to grow soon. The action of Beximco
pharmaceuticals may not get affected by change in unemployment rate.

3. Demographic Factor: The demographics of the population, meaning their respective

ages and genders, vastly impact whether a certain product may be marketed to them.
Beximco has too aware among the people of Bangladesh about proper medication and
sourcing of necessary medicines. Sometimes they would have to rely on very niche
marketing.

4. Environmental factor: The current weather conditions may significantly impact the
ability of to manage the transportation of both the resources and the finished product.
This would affect the delivery dates of the final product in the case. Suppose an
unexpected monsoon would affect delivery date. And in Bangladesh climate changes
constantly which affects various factors as preservation, transportation. This
inconsistency in weather patterns plays a huge role for Beximco pharmaceutical.

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 5. Social cultural factor: Social factors that impact is a direct reflection of the society. This
encompasses culture, belief, attitudes, and values. The impact of social factors is not
only important for the operational aspect, but also on the marketing aspect of Beximco
pharmaceuticals.

6. Technological factors: Technology can rapidly dismantle the price structure and
competitive landscape of an industry in a very short amount of time. It
becomes extremely important to innovate constantly and consistently. For the sake of
maximizing possible profits and becoming a market leader. Beximco has an advanced
and well-developed R&D facility of its own which makes their research and
development. It is also self-sufficient. As the technological evolution in Bangladesh is
happening, this is beneficial for Beximco’s growth of performance.

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Key points.

Implementing all measures to ensure the health and safety of employees.

Beximco Pharma's manufacturing operations are currently unaffected; the Company is experiencing
some disruption to its international distribution network and supply chain but does not foresee any
major shortage of raw materials in the immediate term.
Strong sales performance in the first three quarters of the financial year to 31 March 2020; the Company
anticipates some impact in the fourth quarter; however, Beximco Pharma still expects to report year-on-
year sales growth for the full year to 30 June 2020.
Reporting of Q3 financial results is delayed, as sanctioned by the Bangladesh Securities and Exchange
Commission.
Beximco Pharmaceuticals Limited “Beximco Pharma”, “BPL” or “the Company”; AIM Symbol: BXP, LEI
No.: 213800IMBBD6TIOQGB56), the fast-growing manufacturer of generic pharmaceutical products and
active pharmaceutical ingredients, today provides a business update following the outbreak of COVID-
19.

Bangladesh remains under lockdown, which was implemented on 25 March 2020, as the government
sought to curb the spread of COVID-19. The government ordered the closure of all businesses and
imposed restrictions on the movement of people and transport, except in exceptional circumstances,
such as the provision of food and medicines, so the Company has been able to continue its operations.

Ensuring employee safety

Beximco Pharma's priority is to ensure the health and safety of its employees.
At Beximco Pharma's manufacturing sites, the Company has implemented new work practices to ensure
social distancing. At Beximco Pharma's office-based facilities, employees are encouraged to work
remotely where possible, with the minimum number of people attending the office. At all facilities,
employees are screened upon entry and disinfectants and masks have been made available.
The Company has also set up an emergency response team, available 24 hours a day, comprising of
qualified doctors and healthcare professionals to respond to employee concerns and to provide medical
support in the event they may be exhibiting COVID-19-related symptoms.

Manufacturing and supply chain update

The Company is fully committed to ensuring the supply of its medicines, whilst abiding by government
actions imposed during the pandemic. Beximco Pharma's manufacturing operations are currently
unaffected. However, the Company is experiencing some disruption to its international distribution
network and supply chain, including some delays in transportation protocols. Although Beximco Pharma
does not foresee any major shortage of raw materials in the immediate term, the Company continues to
work closely with its supplier networks and is reviewing alternative sources as part of contingency
planning to ensure supply and distribution of finished product.
Beximco Pharma has also been working hard to urgently introduce drugs with potential benefits for
COVID-19 patients. Amid global shortages of active pharmaceutical ingredients (APIs), the Company has
manufactured hydroxychloroquine, favipiravir and ivermectin, with remdesivir in the pipeline. These
drugs have been suggested as potential promising treatment options for COVID-19 and are being used in
some circumstances in several countries around the world.

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Financial performance

Beximco Pharma continues to evaluate the impact of the pandemic on its financial and
business operations. Following a strong sales performance in the first three quarters of
the financial year (nine months to 31 March 2020), the fourth quarter (three months to
30 June 2020) may be impacted by Bangladesh’s economic slowdown and disruption to
the Company’s international distribution network and supply chain, directly attributable
to the impact of the COVID-19 pandemic. However, for the full year to 30 June 2020,
Beximco Pharma still expects to report year-on-year sales growth, but at a lower level
than originally anticipated. The Company will report its financial results for the third
quarter as soon as possible.

Given the ongoing uncertainties around the impact of COVID-19 on Beximco Pharma
beyond this quarter, the Company is unable to provide the market with a longer-term
view until the situation becomes clearer.

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 SWOT ANALYSIS OF BEXIMCO PHARMACEUTICALS LTD:

Strengths:
1. Largest importer in the country: In the pharmaceuticals sector Beximco is the largest
importer in Bangladesh. It earns 55% of its revenue from export.
2. Strong brand image: Products are being consistently improved and so the brand image.
3. Biggest market share: In Bangladesh it processes the biggest market share than many
other giant medication providers. It offers more than 400 products.
4. Expert employees: Beximco Pharma has many experts like chemists, pharmacist’s,
doctors, MBAs, microbiologist, and engineers who are highly educated and experienced.
It makes company gather more strength in a similar industrial sector.
Weaknesses:
1. Inconsistent in supplying products: Sometimes they are not able to produce specific
products efficiently; as a result, they cannot supply those products to retailers in time.
2. Strong competitor: Square pharma has larger market share than Beximco in
Bangladesh, and the difference in stable.
3. Environmental pollution: For producing purpose, they are polluting water, air and soil in
the area where their factories are set up.
4. Use of cash for promoting purposes: They donated money to the doctors and
promoters for promoting their products. Beximco already has a large market share. If
they do not stop this behaviour, they might lose market share in the future.
Opportunities:
1. Enormous growth: With an employee’s range more than 2700, the company is growing
day by day which is capable of growing market.
2. Building stronger brand: As it is fulfilling social responsibilities, there is also possibility
getting more market shares.
3. New market: With growing need of pharmaceuticals rapidly new markets will open
themselves for doing business.

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 4. Brining new technologies: By bringing in technologies it will help the company’s growth.
Threats:

1. The threat to the environment: As it is polluting environmental elements, if

Bangladesh's regulatory body takes any steps against it which might create a problem
for its growing.
2. Huge competition: First level companies like Square and Incepta Pharmaceuticals are
doing well and gradually gaining more market shares which are another barrier for
Beximco pharmaceuticals.
3. New entrants in the market: As the whole country doing well in the pharmaceutical
sector, the number of newcomers increasing more and more. This might result in
declining market shares.
4. High price: If some products prices are too high other pharmaceuticals companies will
take opportunity to provide those products cheaper. Which will affect the market share.

Bottom line: If we look closely at the SWOT analysis of Beximco Pharmaceuticals LTD, we can
see that there are more competitive advantages than disadvantages. The strategic operations
are highly functional. If weak points are not overlooked and proper steps are taken, this
company will be able to stay in leading position consistently.

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 Beximco Pharmaceutical LTD. Competitive Advantage

Competitive Advantage is the leverage a business has over its competitors. Business level
strategies developed by Beximco Pharmaceutical LTD. help them to earn competitive advantage
through quality, products, superior services, and outstanding customer relationship. They strive
to retain existing customer as well as to attract new ones. Beximco Pharmaceutical LTD. has
developed unique customer service through their Unbiased Medical Service and developed
superior human resource for earning a competitive advantage in the market.
Beximco Pharmaceutical LTD. successfully pursue low manufacturing cost, differential and focus
differentiation advantages to achieve high performance and to prevent being stuck in the
middle.

Low Manufacturing Cost Advantage: Beximco Pharma follow cost leadership strategy. Most of
their product is selling at a lower price. With their high technology and efficient research and
development department they conduct heavy research on how they can minimize their cost of
production. Beximco Pharma have their own paper printing machine and plastic machine. The
cover of the medicine is made by the Beximco Plastic Industries LTD. So, it’s a backward
integration of Beximco Pharma. According to the annual report of Beximco Pharma 2018 the
company reduce its inventory cost 2% every year. However, they always maintain a tight
control over production and reduces overhead cost as much as possible. By reducing the cost
company offers its products at a lower price in the market and that will result in higher profits
over other competitors

Differential Advantage: A differential advantage means increasing the value of a product and
makes it different from others in the market. Beximco Pharma produces the various types of
products in their product portfolio, and they are different from others in the market in terms of
quality and design. The company more emphasis on some important matters such as dimension
of the product form, features, performance, conformance, durability, reliability as well as
service dimension such as order case delivery, installation customer consulting and others. By
considering this the company has able to differentiate the products in the market and that
helps them to achieve economic of scale and a sustainable competitive advantage over its rival.

Focus Differentiation Advantage: A focus differentiation means offering unique features that
fulfil a segment of the market. In pharmaceutical industry segmentation means determine the
segment based on disease. The company is expertise through their advanced drug delivery
systems such as metered dose inhalers, dry powder inhalers, nasal sprays, sterile ophthalmic,
lyophilized injectable, oral thin films, suppositories etc. that have provided strong
differentiation for the company. Many of its products are market leaders in their own
categories the company continuously working to expands its product portfolio to make sure
that people have access to better treatment at lower cost. Napa, Napa Extra, Neofloxin,
Neoceptin R, Atova, Amdocal, Tofen etc. have been household names with strong brand
quality. The expending portfolio based on segments sows their focus differentiation including
high value of product that will continue to drive strong growth in the coming days.
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Beximco Pharmaceutical LTD. always get the first mover advantage because it has already set
industry standards. Innovation strategies have been the key to their success both in product
differentiation and in product promotion.

Conclusion
Pharmaceutical industry in the country is highly competitive and everybody wants to increase
their market share by providing various products to the customer. As a result, companies need
to develop an effective business strategy as well as policy in order to make their position higher
in the industry. Beximco pharma is no different of that. The management of Beximco pharma
always tries to maintain a steady growth by delivering their quality product across the country.
Business environment is getting highly complexed and competitive for that adapting to the
situations by taking necessary step for the wellbeing of the company is very important.

REFARANCES:
http://www.beximcopharma.com/images/training-development-
process/advantage/investor/pdf/annual-report-2018-19.pdf

http://www.thestrategywatch.com/swot-analysis-of-beximco-pharmaceuticals/

https://www.essay48.com/term-paper/9877-Beximco-Pharmaceuticals-Limited-Pestel-Analysis

https://www.educarnival.com/analysis-of-the-competitive-image-of-beximco-pharmaceuticals-
ltd-in-the-pharmaceuticals-industry/

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