SWOT ANALYSIS:

‘’SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to

evaluate a company's competitive position and to develop strategic planning. SWOT analysis
assesses internal and external factors, as well as current and future potential. A SWOT
analysis is designed to facilitate a realistic, fact-based, data-driven look at the strengths and
weaknesses of an organization, initiatives, or within its industry’’. (Will, 2021).

The author (Will,2020) states that the swot analysis is done by using four elements , which
are explained below:

1. Strengths: This is done by using internal data of the organization . strength is what a
company is best at doing . By utilizing this activities in the future it can act as a
competitive advantage for the organization . for example : the company’s product
portfolio .
2. Weakness: This element Is also a company’s inner disability which hinders the
company to act on its full potential and usually acta as an barrier. This is also found
within the company and by using the company’s internal data . for example : weak
supply chain .
3. Opportunities: this element is outside the control of the company and it usually acts
as a blessing for the company . this outside situations will act as a benefit for the
company and will help it to establish new goals and possible growth. For example:
tax reduction ( a fiscal policy taken by the home country’s government ) which in
turn will help the company to reduce their costs .
4. Threats : like opportunities threat is also an element which is outside the control of
the company . this usually has a tendancy to negatively affect the company and
hinders their growth and disrupts the business from performing well . for example :
increase of inflation rate which will in turn increase the cost of the materials and the
production cost of the business .

Figure: (kaplan financial , 2020)

Although swot analysis helps to understand the business in a better way using the four
elements ,it too has some limitations . As the author (Will,2020) claims that it doesnot give
emphasises on which element to focus first and which one to look first whether it be bad or
good one . moreover , the company may not have enough resources to address all the
weakness and threats and it is now upto a good manager to make the decisions which the
company may lack . (Will,2020) states that this business tool should not be used alone and
the elements needs to be studied in depth for future analysis and use .

BUSINESS EVALUATION:
SWOT analysis of Square Pharmaceuticals is outlined below :

STRENGTH:

Market leader
Square pharmaceuticals is achieving a consistent number one position among all national
and multinationals companies since 1985 with about 16.95% market share in june 2018-
2019 to 17.21% market share in june 2020-2021. (pharmaceuticals, 2018-2019,2019-
2020,2020-2021).

Increased growth rate

The company’s sales growth rate increased by 18.68% at bdt 52.93 billion in 2019-2020 from
prior year and in 2020-2021 it grew further by 10.24% which means the business is growing
and is doing good in terms of sales . (pharmaceuticals, 2018-2019,2019-2020,2020-2021)

Consistent increased investment :

The pharma plant which is situated in pabna and kalakoir , the investment done in these
plant were made from internally generation of funds which portrays that the company has
enough liquid cash for carrying out the operations . (pharmaceuticals, 2018-2019,2019-
2020,2020-2021)

Strong product portfolio:

In 2018-2019 square pharma has a total products of 858 of different kinds , where they
launched 53 new products, and in 2019-2020 they launced only 35 products still makng the
grand total to 859 . however , in 2020-2021 year the number jumped making it a total of
882 where they launched further 53 products . this shows that the company is doing more
research and development on making all new kinds of medicine in different category .
(pharmaceuticals, 2018-2019,2019-2020,2020-2021).
Good reputation :
Square is a well known, truested brand which was established and is doing business in
bangladesh since 1985.

WEAKNESS:

Good distribution network channel :

Good Distribution channel should be present throughout Bangladesh not only in main cities
but availability of medicine not only basic one like parasitamol but other important , diverse
medicine should be made available in rural remote areas as well .

Supply chain problem :

Most of the raw materials are sourced from abroad therefore they are moe exposed to
disruption and need to carefully monitor the external environment carefully and need to
have a good inventory control and management , otherwise there will be insufficiency of
raw material problems . this might lead to high cost od price of products if prices increase in
international .therfore acting as a weakess due to lack of control in supply chain.

Technology and development ;

Continuos upgrading and installation of advance technology is needed specially in
pharmaceutical industry , where is reducing is investment is technology where in 2018-2019
it was Tk135.63 milion being the highest one so far and in 2019-20 it reduced drastically and
came to Tk60.30million . this may be due to covid situation . in 2020-2021 it increased to Tk
98.10 million , but compare to increased research and development this value should have
increased drastically signalling that square pharma is lacking behind investing in advance
technology.

OPPORTUNITIES:

Growing market in the economy :

The Pharmaceuticals industry of Bangladesh is expected to grow at a CAGR of 15% over the
next five years due to steady economic growth, population growth, growth of income level
of people and increased health awareness. (MD. Mosavvir Al Ashick, 2018). Since square
pharma is being the number 1 in the market it has the highest share in the growing market .
New export market :
Square Pharmaceuticals will launch its production facility in Kenya within the next four
months in a move that will considerably enhance the company's earnings from East African
nations.this will give rise to new export markets specially in the east African regions and the
countries with in the region .

Threats:

Exchange rate :
Since most of the raw materials and machineries are imports from foreign countries and
square oharma export to around 50 countries as well soon they are going to capture the
east African market , therefore fluctuation in exchange rate will affect the business and will
slow down the business policies and decision making . (habib, 2021)

Threat of substitues :
Pharmaceutical company is quiet lubracative industry in bangladesh’s economy maily due to
its profitable position and being a producer of basix necessity ( medicine) , there are many
subsitutes of the same kind of medicines . for example : beximco company also produces
and distribute cold medicine like the perasitamol .

Covid 19 situation :
Despite covering 45 countries due to civid 19 situation and llockdown in almost all of the
country the export growth rate decline dspite an increase in sontinuous domestic sales
growth . the export rate fell by 8.83% from a rise of 10.95% in 2019-2020 year which is
significant .
Michaels’s porter’s 5 forces :
‘’Porter's Five Forces is a model that identifies and analyzes five competitive forces that
shape every industry and helps determine an industry's weaknesses and strengths. Five
Forces analysis is frequently used to identify an industry's structure to determine corporate
strategy. The Five Forces model is named after Harvard Business School professor, Michael
E. Porter’’. (Gordon, 2020)

Porter's five forces are briefly described below :

1. Competition in the industry

According to the author (Gordon,2020) , competition in the industry being the first
element , it talks about the number of rivals present in the industry in which the
business is operatingand the company’s position in the market , whether they are in
a better position from their rival or not . since basd on the situation , if the
company’s is iin a good position than the rivals then they can gain some advantages
fin terms of suppliers and customers, etc .

2. Potential of new entrants into the industry:

According to the author (Gordon,2020, If more businesses are set up in the industry
then it is likely to affect the business’s position therefore affecting its power and
control . theless barrier and ease is created to enter the industry , there is a high
chance that the business might get negatively affected .

3. Power of suppliers
The author (Gordon,2020) claims that the power of suppliers can influence the cost
of the inputs as well might affect the quality of the raw materials and ultimately
affecting the cost of production and the company’s pricing . if there are more
suppliers of good quality raw materials and it is easy to source them then there is a
high possibility to lower cost and thus increase the profit margin.

4. Power of customers
The author (Gordon,2020) claims that in a industry the number of customers are likely
to influence the cost, pricing and profit margin of the firm . if the number of customers
are higher then the company can enjoy higher profits provided that there are fewer
competition in the industry.
5.Threat of substitute products
The author (Gordon,2020) claims that the business’s position and it’s bargaining power and
industry control is highly influenced by its availability of rivals and their business decisions
and strategies .

Business evaluation of square pharmaceuticals ltd :

Below porter’s five forces are explained in details and in perspective of square pharma :

1. Competition in the industry

Pharmaceuticals industry in Bangladesh is quite lubricating due to the amount of profit and growth
generated . the industry is a growing annually . (MD. Mosavvir Al Ashick, 2018). According to
Bangladesh Association of Pharmaceutical Industries (BAPI) and Directorate General of Drug
Administration (DGDA), approximately 257 licensed pharmaceutical manufacturers are operating in
Bangladesh and about 150 are functional1 . These manufacturing companies meet around 98% of
local demand. (Faisal, 2019, 3rd edition ). Therefore rivalry among the competitors is high , although
square pharmaceuticals has been maintaining the number 1 position , they always need to be alert
and carefully assess the market to maintain their market position.

2. Potential of new entrants into the industry:

Despite being a desirable industry , the potential of new entrants into the industry are likely
to be low due to the strict rules and regulations given by the Bangladesh Association of
Pharmaceutical Industries (BAPI) who monitors and oversees the industry . moreover there
is huge cost to set up the business ,its manufacturing plant, obtaining trade and drug licence
, hiring essential staffs , etc . this invloves a lot of process and technical advices as well
making it costly to operate and set up . (Tahmidur Rahman, 2019).

3. Power of suppliers
‘’Bangladesh, , is spending a fortune every year on importing 97 percent of the raw
materials required by this industry and square pharmaceuticals are no different than others

According to the Dhaka Chamber of Commerce & Industry sources, the pharmaceutical
industry spent $600 million or Tk5,000 crores for importing Active Pharmaceutical
Ingredients (API) in the 2018-19 fiscal year’’. (Noyon, 2019). Therefore , this shows that the
power of suppliers are likely to high due to the dependence of international import of raw
materials , and the policies taken by the foreign countries are likely to affect both positively
and negatively as well.
4. Power of customers
Power of customers are likety to be low since they depend heavily on the doctor’s
prescribed medicine which means they are heavily dependant on doctor’s
recommendation and the switching cost is likely to be lower due to trust issues . if
square pharmaceuticals industry have a good distribution channels and marketing
policies they are likely to grab more customers and retain them for foreseeable future .

5.Threat of substitute products

Since pharmaceuticals industry is likely to be competitive and has over 150 functional
units currently and moreover , the drugs and medicines produced and distributed are
similar between each other , therefore it has become highly competitive and costly to
retain the customers indicating that the threat of substitutes is likely to be higher for
square pharmaceuticals . (Faisal, 2019, 3rd edition )