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Overview of SQUARE Pharmaceuticals LTD
Introduction
Square Pharmaceuticals Ltd. (SPL) has been the innovator in Bangladesh Pharmaceutical Market considering that its inception in 1958. Over the last decade SPL in fact rose to a brand-new basic moving beyond producing quality medications to win mindshare of clients, doctors, investors, business partners, and communities where we work and live. Our commitment to add more worth to the typical wealth of the society intensified by ingenious methods for growth and diversity, pioneering role in bringing brand-new innovation and carrying out brand-new ideas, and dedication for overall quality management distills the magnificence of our success.
Today SPL is not simply a market leader. The majority of the items that it actively markets take pleasure in leadership position demonstrating matchless trust of the healthcare professionals. Today SPL is ready to deal with the obstacle of scarce sourcing of Active Pharmaceutical Components (API) in the post-WTO age, with its advanced a manufacturing capability.
SPL is one of the first business to have a thoroughly computerized and automate workplace linking every corner of the nation to the centre.
We try to focus on the task SWOT analysis, potter five forces, organization style in Square Pharmaceutical Ltd.
Scope: Our project is just record basis so we have not chance to take interview, study and make observation. As it is a report about an company so we have chance to collect data by reading files from their website.
Methodology:
To complete our job and reach in a choice we some methods. To collect information we search internet, read newspaper, and utilize our personal observation.
ABOUT COMPANY:
Square Pharmaceuticals Ltd. is a leading edge pharmaceutical company based in Dhaka, Bangladesh and is acclaimed for its outstanding product quality, world-class manufacturing facilities, product development capabilities and outstanding professional services. SQUARE today symbolizes a name – a state of mind. But its journey to the growth and prosperity has been no bed of roses. From the inception in 1958, it has today burgeoned into one of the top line conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company, is holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985 and is now on its way to becoming a high performance global player. Historical Background of Square Pharmaceuticals Ltd.
SQUARE
Pharmaceuticals Limited is the largest pharmaceutical company in Bangladesh and it has been continuously in the 1st position among all national and multinational companies since 1985. It was established in 1958 and converted into a public limited company in 1991.
1958: Debut of SQUARE Parma as a Partnership Firm.
1964: Converted into a Private Limited Company.
1985: Achieved market-leadership in the pharmaceutical market of Bangladesh among all national and multinational companies.
1987: Pioneer in pharmaceutical export from Bangladesh.
1991: Converted into a Public Limited Company
1997: Won the National Export trophy for exporting pharmaceuticals.
1998: Agro-chemicals & Veterinary Products division of SQUARE Pharmaceuticals starts its operation.
2001: US FDA/UK MCA standard new pharmaceutical factory goes into operation built under the supervision of Bevis Lend Lease, UK.
2005: New State-of-the-Art SQUARE Cephalosporin’s Ltd. goes into operation; built under the supervision of TELSTAR S.A. of Spain as per US
FDA/ UK MHR
A requirements. 2007:
SQUARE Pharmaceuticals Ltd., Dhaka Unit gets the UK MHRA approval. 2012: SQUARE Pharmaceuticals Ltd., Dhaka Unit and SQUARE Cephalosporin’s Ltd. get the Therapeutic Goods Administration (TGA) of Australia approval. Mission:
Our Mission is to produce and provide quality & innovative healthcare relief for people, maintain stringently ethical standard in business operation also ensuring benefit to the Shareholders, stakeholders and the society at large.
Visions:
We view business as a means to the material and social wellbeing of the investors, employees and the society at large, leading to accretion of wealth through financial and moral gains as a part of the process of the human civilization.
Objective:
Our objectives are to conduct transparent business operation based on market mechanism within the legal & social framework with aims to attain the mission reflected by our vision.
Corporate Social Responsibility (CSR):
Corporate Social Responsibility (CSR) is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.
SQUARE’s activity goes well beyond the sphere of business. As socially conscious and responsible corporate body SQUARE is committed to the improvement of the society as a whole. SQUARE helps many NGO’s in their effort to make available healthcare to the disadvantage population of the country. SQUARE is also a major sponsor of sporting events in the country.
Organization Design:
The Board of Directors is responsible for the strategic planning and overall policy guidelines of the bank. Besides, there is an audit committee in the Board to oversee compliance of major regulatory and operational issues. The CEO& MD, Deputy MD and group executives are responsible for achieving business goals and overseeing the day to day operations. The CEO and MD assisted by a senior management group supervise operation of various decisions centrally and coordinate operation of branches. There is also a management committee comprising member of the senior executive headed by CEO and MD to look into all operational function and risk management of the bank.
The workflow of the organizational structure is given in the figure below:
- Work specialization
- Departmentalization
- Span of control
- Chain of command
- Centralization & Decentralization
- Formalization
Work specialization:
Work specialization, which is dividing work activities into separate job task. Individual employees specialize in doing part of an activity rather than the entire activity in order to increase work output. It’s also known as division of labor.
There are some work specialists in SPL.
Research and Development
Information Technology
Human Resource
Supply Chain
Marketing
Customer Development
Business to Business
Finance Department
Departmentalization:
Grouping jobs together is called departmentalization. Departmentalization and Division of labor is the same thing. Each and every organization follows some common forms of departmentalization. The five common forms of departmentalization are:
- Functional Departmentalization
- Geographical Departmentalization
- Product Departmentalization
- Process Departmentalization
- Customer Departmentalization
Functional departmentalization:
Groups jobs according to function. For instance it has the departments for marketing, accounting and finance, human resource and management information system separately. All the departments together form functional departmentalization under managing director
Geographical Departmentalization:
Groups Jobs according to Geographic region. Square distributes its products all over the country using its own distribution channel. It has a large number of vehicles and sales depots to ensure coverage of the whole country. Its coverage is the best in the country.
Product Departmentalization:
Groups jobs by product line.
Process Departmentalization:
In every distribution channel certain type of process is obtained to maintain the customer flow.. To show the way of working of Square Pharma Ltd. under process departmentalization, a diagram is presented below.
Customer departmentalization:
Groups on the basis of specific and unique customers. SPL has several product lines; the tasks are definitely different to serve the customer of individual product line. Customers’ needs and problems differ from one product line to another.
Research and Development:
This department brings ideas to improve and introduce their brands as well.
Information Technology:
The managers of this department find the new technologies available and use.
This technology to drive competitive advantage.
Human Resource Department:
Managers of this dept use to drive the employees in a disciplined manner to achieve organizational goal. Here they also motivate the employees to the fullest possible extent.
Customer Development:
Building relationship with customer and maintain the relation is important job for any organization that and is done by the managers of this departments. This department also tries to find needs and wants of the customers.
Supply Chain Department:
After production how products should be distributed to the supplier- wholesalers, retailer or what would be the chain of supply of the products from production till sales to the final consumer is totally operated by this department.
Marketing Department:
Managers of Marketing department tries to create values of their brands to the customer by taking various steps like- promotion, advertisement, free distribution and so on.
Finance Department:
The vital role is played by finance department these departments develop plans for their financial activities and also prepare the budget for the coming fiscal year.
Span of Control:
How a manager can efficiently and effectively manage his subordinates is called span of control. In case of SPL, they strong span of control as a result they gain market leadership as well as their progress increasing.
Formalization:
SPL is a highly formalized organization; there are explicit job descriptions, numerous organizational rules, and clearly defined procedures covering work process. All employees have to follow guided rules and procedures in SPL. SWOT Analysis of the SQUARE Pharmaceuticals Ltd.
The overall evaluation of a company’s strengths, weaknesses, opportunities, and threats is called SWOT analysis. In general, a business unit has to monitor key macro environment forces (demographic- economic, technological, political-legal, and social-cultural) and significant microenvironment actors (customers, competitors, distributors, suppliers) that affect its ability to earn profits. The business unit should set up a marketing intelligence system to track tends and important developments. For each trend or development, management needs to identify the associated opportunities and threats .
Strengths:
Recognizes as a global company.
Brand value
Strong brand portfolio.
Strong relationship with retailers.
Economies of scale.
Largest organizations
Advanced technology
Well skilled professionals
Good distribution network all over world
Square Pharmaceuticals provided creative strategies
Strong marketing and good image creation
Wide distribution channels in both national and internal markets
Decentralized decision-making.
Weaknesses:
Dual leadership
Not connecting with customers.
Inefficient management of brands.
Focus on short term strategy
High cost of restructuring
Hard to manage and control company structure
High cost limit promotions in company
Opportunities:
Changing consumer’s preference
Increasing need for several diseases
Rural areas are a large prospective market
Employing external job applicants
Gain high market share
Introducing new distribution channel
Promote its products in new geographic areas
Customer base is increasing with effective marketing
Take advantage of the changes of technology
Population expanding at a rapid rate
Low income consumers
Threats:
The threats of the pharmaceutical industry are the analysis of the external industry components that could create an opportunity for the SPL to decline, atrophy or lose some competitive edge. For example, the pharmaceutical industry’s threats could include increased government regulation, a declining economy, increasing research and development (R&D) costs or a decrease in the global population. The threats of SPL are discussed below. Product innovation is ineffective
The high competition for market share increases rapidly
Changes of people’s perception
Political and Economic factors
Increasing social awareness in society
Unfavorable conditions
Acquisition decision
Lack of proper knowledge in medicine
Industry Analysis:
Is a vital part of the decision making process in business? Industry Analysis helps investor to take decision. Industry Analysis also helps entrepreneurs to iron out the wrinkles in their business plans. Michael Porter has identified five forces that are widely used to assets the structure of any industry.
Porter’s five forces are:
- Threat of new entrants
- Threat of substitutes
- Bargaining power of buyers
- Bargaining power of Suppliers
- Current rivalry
Threat of new entrants:
Pharma industry is one of the most easily accessible industries for an entrepreneur in Bangladesh. The capital requirement for the industry is very low; creating a regional distribution network is easy, since the point of sales is restricted in this industry in Bangladesh.
Economies of scale:
Square pharma can easily produce based on economies of scale but it is quite difficult to new entrants for produce based on economies of scale
First mover advantage:
It was established in 1958 and converted into a public limited company in 1991.First mover advantage is part of the standard lore of the I-Cubed Economy. It means that the first company into a market generally wins.
Access to channels of distribution and relationship:
The Square pharma is a large pharmaceutical company in our country so they have large distribution channel and good relationship with the retailers.
Distribution Channel at a Glance:
Threat of substitute Products:
This is one of the great advantages of the pharma industry. Whatever happens, demand for pharma products continues and the industry thrives. One of the key reasons for high competitiveness in the industry is that as an ongoing concern, pharma industry seems to have an infinite future. However, in recent times, the advances made in the field of biotechnology, can prove to be a threat to the synthetic pharma industry.
Bargaining power of buyers:
The unique feature of pharma industry is that the end user of the product is different from the influencer. The consumer has no choice but to buy what doctor says. However, when we look at the buyer’s power, we look at the influence they have on the prices of the product. In pharma industry, the buyers are scattered and they as such does not wield much power in the pricing of the products. However, government with its policies plays an important role in regulating pricing through the National Pharmaceutical Pricing Authority.
Price Sensitivity:
Square pharma is produced the pharmaceutical products which are undifferentiated product and there are few switching cost.
Relative Bargaining Power:
Two factors related to the relative bargaining power
- Number of buyer:
The buyers bargaining power is determined by the number of buyer relative to the number of suppliers.
- Volume per buyer:
It is determined by volume of purchase by single buyer. The number of buyer of Square pharma is a single buyer with several alternative suppliers.
Bargaining power of Suppliers:
The pharma industry depends upon several organic chemicals. The chemical industry is again very competitive and fragmented. The chemicals used in the pharma industry are largely a commodity. The suppliers have very low bargaining power and the companies in the pharma in dusty can switch from their suppliers without incurring a very high cost. However, what can happen is that the supplier can go for forward integration to become a pharma company. Companies like Orchid Chemicals and Sasha Chemicals were basically chemical companies, who turned themselves into pharmaceutical companies. In case of Square pharma there is low bargaining powers of supplier
Current revelry:
Concentration and Balance Competitors:
The number of firms in an industry and their relative sizes determine the degree of concentration. Lots of similar size and strong competitor exist in the market and price competition is likely to be harsh. So square pharma product price is competitive.
Degree of differentiation and switching cost:
Product differentiation is not the driver, cost competitiveness is. However, companies like Square pharma have created big brands in over the years, which act as product differentiation tools.
Excess Capacity and Exit barrier:
It is quit impractical for square pharma or other firms to exit from this industry because of they cannot use those machineries in other purpose. Also here some rules and regulation exist no one cannot easily exist from this industry.
Recommendation
Quality and control: According to international standard square pharmaceuticals ltd. Should maintain their product quality Local market share: At present in Bangladesh square pharmaceuticals is the market leader in pharmaceutical sector. Its followers and competitors always try to increase their percentage of market share. So square pharma concentrate more to increase his market share
Dynamic sales strategies
Due to the customer complaint and the lack of guidelines to prevent untrained sales staff from serving customers, we recommended that square pharma should take dynamic sales strategies for higher customer satisfaction.
Foreign market
Though SPL captured Asia, Africa, Middle East pharmaceutical market but the Europe market till now un-captured. So square pharma should concentrate more in Europe market.
Conclusion
In finally, I can say that Square Pharmaceuticals Limited play an important for economic development of the country after creating job opportunities, and earning profits as well. SQUARE Pharmaceuticals Limited is the largest pharmaceutical company in Bangladesh and it has been continuously in the 1st position among all national and multinational companies since 1985.
Reference:
- http://en.wikipedia.org/wiki/Square_Pharmaceuticals
- http://www.squarepharma.com.bd/index.php
- http://www.scribd.com
- http://www.managementstudyguide.com/swot-analysis.htm
- http://en.wikipedia.org/wiki/Porter_five_forces_analysis
- http://en.wikipedia.org/wiki/Departmentalization
Books:
- Management-10th-Edition-Stephen P.Robbins & Mary Coulter