Challenges And Risks For Bex Pharma Essay

Bex Pharma is transnational pharmaceutical company. This company has chief caput office in Dhaka ( Bangladesh ). In Pakistan pharmaceutical market they import the medical specialty, hive away them and execute the map of gross revenues, distribution and selling. Bex Pharma is private company with 200 employees who perform assorted undertakings. Bex Pharma was located in Lahore and had four million rupees ( about ?18000 ) monthly sale. The company dispatched the stock to assorted distributers who further distribute in to assorted pharmaceuticss and chemist shops within their locality. Pakistan has a really vivacious and forward looking Pharma Industry. At the clip of independency in 1947, there was barely any Pharma industry in the state. Today Pakistan has approximately 400 pharmaceutical fabricating units including those operated by 25 multinationals present in the state. The Pakistan Pharmaceutical Industry meets about 70 % of the state ‘s demand of Finished Medicine. The domestic Pharma market, in term of portion market is about equally divided between the Nationals and the Multinationals.

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Pakistan ‘s US $ 1.62bn pharmaceutical market is the tenth largest in Asia Pacific. The National Pharma industry has shown a progressive growing over the old ages, peculiarly over the last one decennary. The industry has invested well to upgrade itself in the last few old ages and today the bulk industry is following Good Manufacturing Practices ( GMP ), in conformity with the domestic every bit good as international Guidance. Presently the industry has the capacity to fabricate a assortment of merchandise runing from simple pills to sophisticated Biotech, Oncology and Value Added Generic compounds.

Although Pakistan ‘s pharmaceutical and healthcare sectors are spread outing and germinating quickly, about half the population has no entree to modern medical specialties. Clearly this presents an chance, but much more work demands to be done by the authorities and industry ‘s stakeholders. The value of pharmaceuticals sold in 2007 exceeded US $ 1.4bn, which equates to per capita ingestion of less than US $ 10 per twelvemonth and value of medical specialties sold is expected to transcend US $ 2.3 B by 2012.

Pakistan is a developing pharmaceutical market, with a big population and economic advancement evident, but per capita drug disbursement was instead low at around US $ 9.30 in 2007. Private disbursement histories for 65 % of entire healthcare outgo sourced through out-of pocket payments, international assistance and spiritual or charitable establishments. Pharmaceutical disbursement histories for less than 1 % of the state ‘s GDP, comparable to degrees in some neighbouring states but above that in some of the South Asiatic states. The prognosis period is likely to witness the fringy strengthening of the generics sector, albeit more in footings of volumes than values. The portion of generics is besides likely to increase farther as major drugs come off-patent in the close term, to the likely benefit of the generics-dominated local industry.

The Pakistan Pharma industry is comparatively immature in the international markets with an export turnover of over US $ 100 Million as of 2007. Pakistan Pharma Industry boasts of quality manufacturers and many units are approved by regulative governments all over the universe. Like domestic market the gross revenues in international market have gone about double during last five old ages. The Pharma industry is concentrating to an Export Vision of USD 500 Million by 2013. In the interim, exports are besides likely to be boosted by new regional and planetary chances.

The Pakistan Pharmaceutical Industry is a success narrative, supplying high quality indispensable drugs at low-cost monetary values to Millions. Technologically, strong and self reliant National Pharmaceutical Industry is non merely playing a cardinal function in advancing and prolonging development in the critical field of medical specialty within the state, but is besides good put to take on the international markets. ( PPMA 2010 )

Organizational Environment:

Bex Pharma Organization construction can be seen in Appendices p.16. Any organisation has two sorts of environment which is Internal and external environment. In the internal environment we analyze the accomplishments and capablenesss required to execute assorted undertaking. These can be analyzed by Resource audit, nucleus competences, and value concatenation analysis and alteration direction. In External analysis we analyze the external environment. For that intent we used the Pestle analysis, Swot analysis, Porter five Forces and Ansoff Matrix. Ansoff matrix is chiefly concerned in future determination.

Internal Business Environment: Has the following

Resource Audit: classified in to assorted classs

Physical resources are constructing, equipment land and so on

Human resources are chiefly accomplishments ; cognize how, strong squads, good direction and so on

Fiscal resources are ability to raise hard currency, rich parent and so on

Other resources and intangibles which may include good will, trade name names and trade relationship.

By measuring these we came to cognize that which are our strength and failing. Do we necessitate some aid outside the organisation and decently utile of resources to maximise the end products.

Analysis of cost and net income: it is besides tool which used to look into the advancement in term of fiscal apparatus

Bench marker is objectively to compare resources, capablenesss and procedure with the highest criterion that have been achieved anyplace. This requires comparing with universe category. In the resource audit it is really of import to research all resources to demo maximal end product. However it besides analyzed that we have to acquire the resources from outside to carry through the undertaking. This is really of import tool used to look into the capablenesss of organisation.

Value concatenation analysis: Porter ( 1985 ) introduced the new construct of value concatenation. His definition of value is the monetary value that a client is prepared to pay for an offering. Value concatenation analysis divides the endeavor in to a concatenation of activities.

Figure ( 1 ).Value concatenation analysis

Primary activities are straight concerned with the creative activity or bringing of a merchandise or service.

Support activities: Each of these groups of primary activities is linked to back up activities and these aid to better the effectivity or efficiency of primary activities.

Bex Pharma chief activities are marketing and gross revenues and operation which are supported by effectual procurance, engineering and substructure. For the value concatenation, there should be effectual communicating and squad work. ( Johnson and Scholes 1999 )

Supply concatenation analysis: is the extension of value concatenation construct in which the focal point is on the value contributed by different participants in a supply concatenation instead than on the different activities of individual endeavor. It is a tool of both internal and external analysis as it is reexamining the value contributed by each participant from natural stuff supply to concluding consumer.

Identifying nucleus competency: A proficient or direction subsystem which integrates diverse engineerings, procedure, resources and cognize how to present merchandises and services which confer sustainable and alone competitory advantage and added value to an organisation. ( Tampoe 1994 )

Change direction theory:


Driver establishes the overall context with which any organisational alteration occurs. Change is catalyzed by figure of forces that trigger first consciousness and so action. These signals are originate from organisational environment or market topographic point. Driver act as signal to bespeak the alteration ( Anderson and Anderson, 2010 )

Internal Drive Resistance Leadership and vision Technology License and up gradation Culture and Management Style Employee Dissatisfaction External Driver Globalization Merger and acquisition Customer satisfaction Collaborative partnership

Figure ( 2 ) Internal and external driver consequence on Business environment

Note ( Arrow thickness show the strength )

Globalization brings the new alterations and challenges for the organisation. Multinational companies truly suffer due to alter and do the scheme consequently. In alteration direction, following theories tool can be used.

Deming Change Cycle:

Deming ( 1950 ) give the theoretical account sing the alteration which is besides known as PDCA Cycle. Model has four chief parts which is shown below.

Consolidate the procedures

Establish a new manner of working

What is to be achieved?

Who will be affected?

Where and when go on?

Each measure of process

4 Act 1 Plan

Act and supervise the consequences

Train where required

Pull off the procedures

Make the consequences run into outlook?

Is alteration required?

3 Checks

2 Do what the program requires

Figure ( 3 ). Deming Change Cycle by Deming. ( Grieves 2010, p.339 )

2 Root cause Analysis: Anderson and Fagerhaug ( 2006 ) explained the root cause analysis.

Root cause analysis is a structured probe that aims to place the true cause of job and action necessary. It is similar to do and consequence theoretical account. This could be simple with one cause and complex with multiple causes. This can be shown in diagram below. This is the job resolution technique.

What is problem/ ? A job is a province of trouble that needs to be resolved. ( Worknet )

Poor Inventory Poor gross revenues

Dead/ Over Stocking/ Expires

Manual order and recoding system

Old System

Figure ( 4 ). Root Cause Analysis. ( Anderson and Fagerhaug, 2006 p.5 )

Bex Pharma directors planned to utilize the root cause theoretical account to happen out the job. When the job is identified they used job work outing procedure to happen out the solution which is shown in diagram ( 4 ) Bex Pharma Managers realized the symptom which is hapless sale so they analyze the job.

External Environment:








Figure ( 5 ).PESTLE analysis

Political: these are political factors which are influenced by Government new policies and regulations.This is besides affected by revenue enhancement policy, labour jurisprudence and trade limitation. This factor overall influence the scheme of organisation. If there is political agitation it will make jobs for concern.

Economic: These factors include economic growing, involvement rate, exchange rate and rising prices rate. During processing or explicating selling program these factors should be considered. Now a twenty-four hours there is recession and every concern is fighting so we have to see it.

Sociable: It associated client penchant, civilization, and populating manner of population, population growing and attitude.

Technological: In recent century the universe is revolutionised by engineering. The engineering alteration really quickly. Research and development and mechanization are chief portion of this. Globalization besides brings the cognition of new engineering which concern has to react.

Legal: In this we include the wellness and safety, employment jurisprudence, consumer jurisprudence and favoritism jurisprudence.

Environmental: The environmental factors include environment and ecological alteration. More companies are interested in clime alteration e.g. Mark and Spencer introduced program A which is echo friendly. This is chiefly associated with proper handling of waste stuffs. ( Cannon 1998 )

Five Forces Model

Porter five forces: Porter ( 1980 ) explains the five forces who affect the selling scheme.

Porter five forces chiefly provide the information about market, rivals, purchasers and provider. By proper analysing these factors, the particular concern sector can accomplish the competitory advantage. The new entrants are ever menace which can come in in the market. The bing rival can impact by alone merchandise, superior quality, client attention and service. The purchasers can be targeted by their socio civilization tendencies and penchant. By analysing the assorted providers we can amend the term and status which are suited for organisation and concern.



Rivals Rivalry


Potential Entrants

Menace of new entrants Dickering power of providers Dickering power of purchasers Threat of replacements Figure ( 6 ) Five forces theoretical account by Porter. ( Cheverton 2004, p.29 )

Rivalry competition ever acts as barrier for new entrants. ( Bonne et al. 2010 )

SWOT Analysis This theoretical account is given by Humphery ( 1960 ). This is the basic theoretical account which gives the information of the concern and organisation strength and failing. The chance and menace which can organisation hold. By this basic theoretical account we can analyse the internal every bit good as external environment.

Stake holder analysis by Ansoff matrix:

Kellaway ( 1999 ) has suggested that the lone manner for a company to stand out is by non holding a mission statement at all as they seem to be the same.

Stake holder is any group with an involvement in the activities and consequence of endeavor. Different group of stakeholder tend to differ in their values and tend to hold different positions. Analysis of stakeholder can non be precise but it is utile to place


Least Important

Consult and Involve

Avoid Annoying

High Extent of power


Low High Inclination to exert power

Figure ( 7 ) Model for analyzing interest holder power

These tool aid to find where we are standing and what should we make for hereafter. The scheme can be formulated consequently. Now we will discourse the scheme and planning.

What is scheme: Drucker ( 1955 ) depict that direction has no pick but to expect the hereafter, to try to model it or equilibrate short scope and long scope end.

Mintzberg ( 1989 ) besides describe that director ‘s work at an grim gait and their activities are characterised by brevity, assortment and discontinuity.

Corporate scheme: is concerned with the overall intent and range of the organisation to run into the outlook of proprietors and or major interest holders and add value to different portion of the expertness.

Goold et Al. ( 1994 ) give the historical development of believing on corporate scheme.

How the constructs of corporate scheme have developed

Old ages



Corporate scheme


Overload at Centre




Quest for growing

General Management Skill



Resource allotment

Portfolio planning

Balanced portfolio


Value spreads

Value base planning



Specifying the nucleus concern

Dominate logic nucleus competences

Linked Portfolio


Share holder value

Exceeding cost of capital

Focus on value

Beginning: Adapted from M. Goold, A. Cambell and M. Alexander, Corporate Level scheme, Wiley ( 1994 )

Amram and Kulatilaka ( 1999 ) suggest that many strategic picks can be valued straight by sellers by measuring them as fiscal option. Corporate scheme besides addresses the inquiry to extent of the corporation and is needfully closely related to amalgamations and acquisition. Corporate scheme must turn to the inquiry about the way, values and range of concern as a whole and how it intends to run.In pattern corporate scheme are sensitive to the demands of fiscal market. These can restrict the logic of scheme direction.

In Publicly quoted concern, corporate degree scheme is to a great extent influenced by the outlook of portion holders and the stock market. The 2nd degree can be thought in footings of concern unit scheme. Strategy is about how to vie successfully in a peculiar market and how advantage over rivals can be achieved. New chance can be identified and created in markets. It besides concern with the client demand, demands, long term profitableness and market growing or step of efficaciousness. There are some theoretical accounts which summarise and show the nexus between them.

The strategic Planning, execution and control procedures

Planing Implementing Controling

Measuring Consequence

Diagnosing consequence

Taking disciplinary action



Corporate planning

Divisional planning

Business planning

Merchandise planning

Figure ( 8 ) Strategy planning and execution

Strategy Formulation: Brews and Hunt ( 1999 ) explained that be aftering procedure need several old ages to bed down and get down to bring forth consequences.

There are 11 stairss or things which are chiefly see in preparation

Customer consciousness, Supplier relationship, Stakeholder influence, apprehension of competency, Awareness of technological alterations and invention, Mix of people involved in the procedure, Encouragement and apprehension of top direction, Communication and feedback, A sound logic and balance of procedure, Process design and see function of external support.

Tri angle of corporate scheme

Competitive Advantage

Resources Vision Business

Goal & A ; Aims

Co Ordination Control

Organization, systems procedure

Figure ( 9 ) Corporate Triangle

Beginning: Adapted from Collis and Montgomery ( 1998 ) corporate advantage, Harvard concern reappraisal

This is the basic trigon which is supported by organisational concern construction and system. Scheme is straight influenced by the concern environment and alteration consequently to accomplish the aims and ends. Strategy is planned with regard of concern environment.


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