UNDERSTANDING THE PROSPECT FOR GROWTH OF ANIMAL

HEALTHCARE PHARMACEUTICALS INDUSTRY IN BANGLADESH:

A CASE OF GENTRY PHARMACEUTICALS LIMITED

Supervised by Submitted by
Md. Farhan Imtiaz Jakir Ahmed
ZR 20
Lecturer
MBA-50D
 COMPANY PROFILE
Gentry Pharmaceuticals Limited
 Founded in 2009
 Solely Dedicated to Animal Health care products
 Poultry, Large animal and Aqua Products
 Factory at Bhangahati, Shreepur , Gazipur
Products
 Poultry Products
 Therapeutics: Colipol Vet, Colipol-T Vet, Ambropol Vet etc.
 Nutritional:Amivet ,Calvita, Calvita-P, Digestive P etc
 Premix and Feed Additives: Toxin Binder, Pellet Binder etc
 Large Animal Products
 Therapeutics: Alrex Vet,Metoba Vet,Oxyba Vet etc
 Nutritional: Calvita P, E-plus Bolus, Digestive etc.
 Injectable: Amitop-S, D-Pron, Supercal etc.
 Aqua Products: Zeolite, Pellete Binder
 COMPANY PROFILE
Production Capacity
 Tablets: Wet Granulation Facility with a Maximum Capacity of 80kg per batch caters to the
Tablet Press and Blister Packaging Machine. The tablet Production has a Capacity of about 25
Million Tablets per year based on single shift operation.
 Powders: Powder Processing has a Dry Blending Capacity of 100 kg per batch. The Powders are
packed in Containers as well as sachets of different sizes with several packaging machinery.
Annual Capacity is about 40,000 kilograms.
 Liquids: The Liquid Section has a Processing & Packing capacity of 500 Liter per Batch and the
products are packed in bottles of 100 ml to 1 liter Sizes. The Facility has a capacity to pack
about 250,000 Liters per year on single shift
 COMPANY PROFILE
Work Force
 250 employees
 120 in the sales team
Scope of spending money on marketing of Gentry pharmaceuticals
 Free samples-56%
 Detailing of physicians-25%
 Detailing of Chemists-12.5%
 Veterinary Clinic detailing-4%
 Journal ads-2%
Marketing to health care providers takes four main forms
 Gifting
 Detailing
 Drug samples
 Sponsoring continuing medical education (CME
 OBJECTIVES, SCOPE, METHODOLOGY AND
BroadLIMITATTONS
objective
To analyze the animal health pharmaceuticals sector as an industry and Gentry Pharma's prospect for growth in
the industry
Specific Objective
 To analyze the Animal Healthcare Pharmaceuticals industry and identify problems and prospects for the
existing and upcoming companies of the industry
 To analyze Gentry Pharmaceuticals using different matrices, find out its standing in the industry and suggest
strategies for the company to survive and thrive in the industry
 To carry out a research from its sales department perspective for finding out reasons behind current low
sales of Gentry Pharma's products
 OBJECTIVES, SCOPE, METHODOLOGY AND LIMITATTONS
Scope
Various drugstores (the ones that sell veterinary medicine) and veterinary clinics of Mymensingh

Methodology
 Primary Data from Organization
 Secodary data from BBS, DGDA
 Questionnaire survey
 10 Chemists( drugstore Owners)
 10 veterinarians
 10 sales management staff of GPL
 OBJECTIVES, SCOPE, METHODOLOGY AND LIMITATTONS

Limitations
 Sales Department Perspective Only
 INDUSTRY PROFILE

Animal Healthcare Market Size

Annual 2015 (Total TK 1535 core)

150

Poultry
Dairy
475 Aquaculture

910
 INDUSTRY PROFILE
Market Growth Year to Year

1000
910
900
800 730 760
700 675
600
475 Poultry
500 Dairy
420
400 380 Aqua
310
300
200 150
90 120
100 70
0
2012 2013 2014 2015
 INDUSTRY PROFILE

Market growth from 2014 to 2015

20%

25%

Poultry
Dairy
Aquaculture

13%
 INDUSTRY PROFILE
Market Players
S.L.No Name of the Sales Amount in Growth
company 2015 percentage
(crore Tk)
01 Reneta 262 33
02 ACI 213 27
03 ACME 182 13
04 Square 118 27
05 SK+F 110 24
06 Novartis 108 10
07 Navana 50 12
08 Opsonin 42 11
09 Techno 38 14
10 AL-modina 28 10
11 Others 384  
  Total 1535 core 18
 GPL’s Standing

Market Share: 1.19%

Growth 7%
18.37
17.16

2014 2015
 INDUSTRY ANALYSIS
PEST Analysis

Social Preference using household Treatments

Factors

Use of magic/ tantrics /ozhas /hakims is

prevalent in Bangladesh

Ignorance of inoculation and vaccination

has prevented the eradication of diseases
like FMD, HSBQ, Anthrax, RD,IBD and
others
 INDUSTRY ANALYSIS
PEST Analysis

Politica Industry threatening to impose even more

l stringent price control
Factors
DGDA nullifies the market forces from
encouraging competitive pricing of goods
dictated by the market

Excise Duty on the cost of manufacturing

to the MRP thereby making the finished
products more costly
 INDUSTRY ANALYSIS
PEST Analysis

Technologica Advanced automated machines have

l Factors increased the output and reduced the
cost

Computerization has increased the

efficiency of the animal
Pharmaceuticals Industry

Advances in Bio-technology, Biological

research have given Bangladesh a step
forward
 INDUSTRY ANALYSIS
PEST Analysis

Economic Customers spend a very small proportion of

Factors its income on animal health, until severely
sick

Adequate storage and transportation

facilities for animal health drugs is lacking

Poor infrastructure like roads & rail

network
 INDUSTRY ANALYSIS
Porter’s Five Forces Model

Suppliers’ Bargaining Power Buyers’ Bargaining Power

Moderate High, Moderate

Competitor Rivalry
High

Threats of New Entrants Threat of Substitutes

Low High
 INDUSTRY ANALYSIS
SWOT Analysis
Strengths
 Animal healthcare drugs are similar to human pharmaceuticals drugs and no specialized
machinery is required for manufacturing them.
 Sizeable population of high yielding cows and buffalo; large domestic market for milk and milk
products.
 Animal-health research and development is much faster, less expensive and more predictable
than human pharmaceuticals.
 Bangladesh’s large number of
600 Veterinary Hospitals/Polyclinic
10000 Veterinary Dispensaries
 INDUSTRY ANALYSIS
SWOT Analysis
Strengths
 The penetration of animal health products is less than 15% in Bangladesh.
 Bangladeshi manufacturers are one of the lowest cost producers of drugs in the world, drug
manufacturing in Bangladesh is up to 50 percent cheaper than in western industrial countries.
 Animal healthcare companies promotional strategy is based on direct contacts with customer
like dairy farmers, poultry farmers and indirect selling through veterinarians, livestock
supervisor etc.
 Animal drug competition is less susceptible to generic influence except some oral supplement as
well as nutritional products
 INDUSTRY ANALYSIS
SWOT Analysis
Weaknesses
 There is no any stringent law for nutritional products so that most of the mal-practices are using
by the regional and local player.
 Distribution channel are highly fragmented, difficult to make products available and it increases
distribution costs for animal health products.
 Industry is highly dependent on imports from China.
 Infrastructural requirements like power, roads and railroads is inadequate, lack of advance labs
and related infrastructure for drug testing and appropriate treatment method.
 There is a conspicuous lack of strong linkage between industries and academician for marketing
research and advance drugs discovery
 INDUSTRY ANALYSIS
SWOT Analysis
Weaknesses
 Low capability and motivation for cutting edge research, diagnosis labs, drug sensitivity and
platform weakness
 Due to fragmented nature of cattle population mostly non-descript animals in rural Bangladesh,
it’s more expensive and time-consuming to penetrate the market by the sales force and
increases the sales and distribution costs to the animal health companies.
 Price Regulation reduces the pricing ability of companies, leads to lower profitability for the
companies.
 Negligible expenditure on animal healthcare research & development.
 Lack of appropriate marketing research before launching products
 INDUSTRY ANALYSIS
SWOT Analysis

Opportunities
 Key opportunities for growth are the willingness of farm owners to spend more on the health of
their animals and the ability of veterinarians to meet that need.
 Very lucrative high profit making market with the high chances of growth, increase awareness
among people about nutrition, vaccination, bio- security, animal health and productivity.
 Future trends include product development for growing segments like biological products for
companion animals, increased shopping at retail outlets and through internet and over-the-
counter (OTC) products posing steep competition to prescription.
 The professionalization of poultry industry, changing focus of farmers from treating to
preventing disease are other factors will facilitate rapid growth of the sector
 Emergence of new diseases, changes in animal production practices, high yielding cattle’s and
new product introductions and ongoing food safety concerns.
 INDUSTRY ANALYSIS
SWOT Analysis
Opportunities
 The companion animal and Aqua (fisheries) segment would be tomorrow market, while poultry
will remain at the centre of animal health industry, as the functional food market is likely to
grow in Bangladesh.
 Frequent outbreaks of animal diseases such as avian influenza, anthrax, and other viral and
bacterial infections, animal healthcare companies has gained tremendous significance across the
Bangladesh Territory.
 There is a large unorganized sector, estimated at Tk 40,000 million, comprising regional players
and local importers of animal health products from others Asian countries.
 INDUSTRY ANALYSIS
SWOT Analysis
Threats
 Increased feed cost of poultry as well as cattle, and inflationary pressure continue to be areas of
concern.
 Inadequate infrastructure and cold storage facilities, impact prospects for export and cause
price fluctuation in the poultry segment.
 Marketing in the village include some unplanned motor-cycle tour and unavailability of public/
private transport as well as travelling by three-wheeler is highly expensive to the companies.
 Industry Analysis
SWOT Analysis
Threats
 Poorly educated rural population, lack of adequate qualified veterinarian, lack of awareness of
ailments or symptoms, cultural gaps between urban marketers and rural dairy farmers, scant
availability of marketing research.
 Increasing competition from emerging manufacturer in China and east Europe
 The Directorate General of Drug Administration (DGDA) puts unrealistic ceiling on product prices
and profitability and prevent veterinary pharmaceuticals companies from generating investible
surplus. The uncertainty in the pricing policy is obviously a threat.
 Portfolio Analysis of GPL

BCG Matrix

Company Market Market share Relative Market Growth Revenue

Share of Largest Market (crore Tk)
Competitor Share

Reneta 17.07% 17% 1.00 33% 262

Square 7.60% 17% 0.45 27% 118

Al-Modina 1.80% 17% 0.11 10% 28

Gentry 1.19% 17% 0.07 7% 18

Portfolio Analysis of GPL
BCG Matrix
 Portfolio Analysis of GPL

BCG Matrix
Therefore strategic options for Gentry should be —
 Expansion
 The expansion plan must be aided through external financing.
 Portfolio Analysis of GPL

GE model
Market Attractiveness
Factors Weight Rating 1-5 Value
Overall market size 0.2 4.5 0.9
Market Growth Rate 0.25 4 1.0
Industry Profitability 0.2 4 0.8
Industry Rivalry 0.15 2.5 0.375
Promotion 0.1 2 0.2
Technological Innovation 0.1 2 0.2
Total 1.00 3.475
 Portfolio Analysis of GPL
GE model
Business Strength( GPL)

Factors Weight Rating 1-5 Value

Market Share 0.25 1.5 0.375
Product Quality 0.25 4 1.00
Brand Equity 0.25 2.5 0.625
Sales force 0.25 1.5 0.375
1 2.375
Portfolio Analysis of GPL
GE model
 Portfolio Analysis of GPL

GE Model
The strategic concern for this particular position is as follows:
 Protect existing programs
 Concentrate investment in segments where profitability is good and  risks
relatively low
 Problem Identification and Analysis
Hypotheses
 H1: Inadequate communication with veterinarians is a cause of low sales of Gentry Pharma's
products
 H2: Inadequate communication with the chemists is a cause of low sales of Gentry Pharma's
Products
 H3: Perception of low effectiveness of Gentry Pharma's products among veterinarians makes them
not prescribing Gentry Pharma's Products
 H4: Recruiting enough number of well-trained sales executives will increase the sales of Gentry
Pharma's Products
 Hypotheses Testing
H1: Inadequate communication with veterinarians is a cause of low sales of Gentry Pharma's
products

Model Summary
Model R R Square Adjusted R Square Std. Error of the
Estimate

1 .725a .526 .467 .539

a. Predictors: (Constant), Frequency of Sales Executive Visit to Veterinarians
 

Coefficientsa
Model Unstandardized Standardize t Sig.
Coefficients d
Coefficients
B Std. Error Beta
(Constant) .679 .444   1.529 .165
1 Frequency of Sales
Executive Visit to .679 .228 .725 2.981 .018
Veterinarians
a. Dependent Variable: Frequency of Prescription of GPL products
 Hypotheses testing

Since the P value is lower than 0.05, so H1 cannot be rejected. So it can be

concluded that lack of communication with doctors is a cause of low sales of
Gentry Pharma's products.
 Hypotheses Testing
H2: Inadequate communication with the chemists is a cause of low sales of Gentry Pharma's
Products

Model Summary

Model R R Square Adjusted R Square Std. Error of the

Estimate
1 .802a .643 .598 .500
a. Predictors: (Constant), Frequency of Sales Executive visit to chemists

Coefficientsa
Model Unstandardized Standardiz t Sig.
Coefficients ed
Coefficient
s
B Std. Error Beta
(Constant) .571 .457   1.249 .247
1 Frequency of Sales
Executive visit to .857 .226 .802 3.795 .005
Chemist
a. Dependent Variable: Frequency of Suggestion of GPL products
 
 
 Hypotheses Testing

Since the P value is lower than 0.05, so the H2 cannot be rejected. So it can be
concluded that lack of communication with the drugstore is a cause of low sales
of Gentry Pharma's Products
 Hypotheses Testing

H3: Perception of low effectiveness of Gentry Pharma's products among

doctors makes them not prescribing Gentry Pharma's Products.

Perception of low effectiveness of GPL products

  Frequency Percent Valid Percent Cumulative
Percent

Yes 1 10.0 10.0 10.0

No 3 30.0 30.0 40.0
Valid
No idea 6 60.0 60.0 100.0
Total 10 100.0 100.0  
 Hypotheses Testing

From the frequency distribution, we have found that 60.0% doctors have
no idea about the effectiveness of Gentry Pharma’s products while 30%
doctors do not consider Gentry Pharma’s product to be less effective.
So, H3 is rejected
 Hypotheses Testing

H4: Recruiting sufficient number of well-trained sales executives will increase

the sales of Gentry Pharma's Products.

Appointment Of Sales Executives

  Frequency Percent Valid Percent Cumulative

Percent
Yes 7 70.0 70.0 70.0

Valid No 3 30.0 30.0 100.0

Total 10 100.0 100.0  

 Hypotheses Testing

From the frequency distribution, we have found that 70% management officials
of Gentry Pharma think that recruiting sufficient trained sales executives will
increase the sales of Gentry Pharma’s products. So, H4 cannot be rejected.
 Recommendations

As the BCG Matrix and GE Matrix suggests, the strategic options for Gentry
Pharmaceuticals can be-
 Expansion
 The expansion plan must be aided through external financing
 Protection of existing programs
 Making investment in segments where profitability is good and  risks relatively
low
 Recommendations
From the conducted Research, following recommendation can be made
 Recruitment of enough number of well-trained sales executives
 Organizing more seminars and symposia for promotion of products
THANK YOU ALL