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Strategic Management

A REPORT OF
Strategic Management
On

Business level strategy of Incepta
Pharmaceuticals ltd







Submitted To:

Ms Liza Khanom
Assistant Professor
Department of Management Studies
Jagannath University



Submitted By:

Shubarna Sabrin, Roll:104806,
Aklima Akter Lima, Roll:104846,
4
th
year 2nd semester (Sec-B)
Department of Management Studies
Jagannath University

Date of Submission: 6
th
May, 2014

Letter of Transmittal



Tuesday, May 6, 2014,
Ms Liza Khanom
Assistant Professor,
Department of Management Studies,
Jagannath University, Dhaka.




Subject: Submission of the Report on Business Level Strategy on Incepta Pharmaceuticals Ltd.




Dear Madam,
I would like to thank you for assigning us to prepare a Report on Business Level Strategy on Incepta
Pharmaceuticals Ltd. This task has been given us the opportunity to explore about the important
aspects of strategic management. The assignment contains comprehensive details on the Business
level strategy.

I would be very happy to provide you with any clarification regarding the assignment. Would you
please kindly accept my paper and oblige me thereby.




Sincerely yours,

Shubarna Sabrin, Roll:104806,
Aklima Akter Lima, Roll:104846,
4
th
Year 2
nd
Semester (Sec-B)
Department of Management Studies,
Jagannath University.






Acknowledgement



At the very beginning we acknowledge the immeasurable blessing and profound kindness of the
Almighty.
To make a report on Business Level Strategy on Incepta Pharmaceuticals Ltd is very interesting and
educative one. As a part of Strategic Management course we enjoyed to prepare such type of
Report. To complete this report we have taken help from different sources. We are grateful to our
honorable course instructor Ms Liza Khanom, who has guided us from starting to ending of the report.
It would not be possible to complete the report within the time duration if he didnt help us. We have
also taken help from different websites what we have mentioned in the appendix. I have worked to
collect data from different sources. Still there may have some errors. We beg apology if there happen
any mistake.
Finally, we are pleased to complete the assignment on the given topic properly & authentically.











Table of Contents

Sl No Contents Page No.
1.
Introduction of business level strategy
1
2.
Objectives of the study
1
3.
Methodology (how to collect data)
1
4.
Limitation of the study
1
5.
Company Profile
1, 2, 3
6.
SWOT Analysis
3, 4
7.
Business strategy
4, 5, 6, 7
8.
Some Competitive Advantages of Incepta
7, 8
9.
Value Chain
8
10.
Porters five forces model:
9
11.
Recommendation:
9
12.
Conclusion
9

Page | 1

1. Introduction of business level strategy

In the modern competitive world to survive on any industrial sector an organization must
follow the business level strategy.
Business level strategies is an integrated and coordinated set of commitments and actions the
firm uses to gain a competitive advantages by exploiting core competencies in a specific
product markets.
The purpose of a business level strategy is to create differences between the firms position
and those of its competitors. To position itself differently from competitors, a firm must
decide whether it intends to perform activities differently or to perform different activities.
So in this segment, we will try to know what kinds of business level strategy are followed by
the renowned pharmaceutical company Incepta in Bangladesh.


2. Objectives of the study

A clear objective help in preparation of well decorated report in which other take the right
type of decision. More specifically the study is intended to achieve the following objectives:
To know the business strategy practice of Incepta Pharmaceuticals Limited.
To identify the various avenues for developing the strategy of Incepta Pharmaceuticals
Limited.


3. Methodology (how to collect data)

This report is based on both primary and secondary data. Initially, the work is started with
data those were available at Companys Brochure and other sources. Moreover, it becomes
helpful to gather some more information from the website of the company. Later on, the work
progressed through some depth interviews of good range professionals trying to heat some
expected area of the study. Then I analyze those data from many angles, in different aspect
and present the information in different segment according to their category, in compact way.


4. Limitation of the study

This is my first initiative for making a report on "Business Strategy of Incepta
Pharmaceuticals Ltd" I was really unable to collect enough information from Incepta due to
their official restrictions. Many things were so confidential that I was not entitled to access
there. Beside this I have faced the following hindrances in preparing this report:
Lack of knowledge and experience about Business Strategy.
Short of time
Lack of sufficient privileges
Lack of communication facilities
The report focuses on Business Strategy of Incepta Pharmaceuticals Ltd". The survey may
not be more comparable or more valid. Moreover, the report is emphasized on the primary
data such as interview of the high officials of Incepta Pharmaceuticals Ltd.

5. Company Profile

Incepta Pharmaceuticals Ltd. is now the 2nd largest company of the country and recognized
as the fastest growing of the top five manufacturing company in the country. Incepta
Pharmaceuticals Ltd. is a leading pharmaceutical company in Bangladesh established in the
Page | 2

year 1999. The company has a very big manufacturing facility located at Savar, 35 kilometer
away from the center of the capital city Dhaka.

Incepta began its operation with a handful of highly skilled and dedicated professionals
guided by an able leadership. Proper strategic planning, technical excellence, swift and timely
decisions helped us achieve our objectives leading to much faster growth. Incepta was able to
anticipate the need of the market and provide the right product at the right time. High focus
on R&D investment from the very beginning made possible the introduction of quality
products ahead of its competitors in most cases.

5.1 Mission
Provide people globally with high quality health care products at affordable prices in order to
improve access to medicine and to provide employees an enabling environment that
facilitates realization of their full potential.

5.2 Vision
It wants to become a research based global pharmaceutical company in addition to being a
highly efficient generic manufacturer. To discover and develop innovative, value-added
products that improves the quality of life of people around the world. And contribute towards
the growth of our Nation.

5.3 Products
The Company produces various types of dosage forms which include tablets, capsules, oral
liquids, ampoules, dry powder vials, powder for suspension, nasal sprays, eye drops, creams,
ointments, lotions, gels, prefilled syringes, liquid filled hard gelatin capsules, lyophilized
injections, human vaccine etc.







Since its inception, Incepta has been launching new and innovative products in order to fulfill
unmet demand of the medical community. The focus has always been to bring new, more
technologically advanced molecules and innovative dosage forms to this country.

Inceptas position in Pharma market
















Page | 3

Inceptas growth in short period of time






















6. SWOT Analysis

The factors affecting the organization can usually be classified as:

Internal factors
Strengths
Weaknesses

External factors
Opportunities
Threats

6.1 Strengths:
Products acceptable in the global market as Quality Products
Wide range of products
Strong brand image created by the market leaders parallel to MNC s
Large pool of efficient and qualified technical manpower at minimum cost
Supportive government policy attracting foreign investors
Large domestic market with reasonable growth rate
One of the largest sector of capital investment
6.2 Weaknesses:
Patent law (patents & drugs Act 1911) is not updated to accommodate benefits of
LDCs.
Dependency on imported raw materials
Absence of international standard quality control and testing laboratory
Absence of bio-equivalence testing and clinical facilities.
Absence of API(Active pharmaceutical ingredients) plants
2
6.5
8.5
11.5
16
27
33
39.5
50
65
85
100
122
148
0
20
40
60
80
100
120
140
160
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
Inceptas
Sales
(in $M
USD)
Year
Page | 4

6.3 Opportunities:
Huge potential to set-up manufacturing plant for API
Liberal government policy for the foreign investors for joint venture pharmaceuticals
unit.
Large pool of qualified technical personnel may set up manufacturing units in other
LDCs
Positive points of Drug policy, if foreign companies can show 7.5% saving of foreign
exchange mark up is flexible.
Domestic market is gradually increasing with the increase in GDP.
Scope for product diversification into herbal and animal healthcare.
Research and development activities may be initiated with external support.

6.4 Threats:
Cheaper medicine from China and India.
TRIPS may bring tough competition in the local and export market.
The sector is dependent on imported raw materials, any fluctuation in raw material
prices or rate
Neighboring countries supplying products to Bangladesh through unauthorized
channel.
Availability and increase of the active ingredients to Bangladeshi Industry.
WHO GMP has changed to CGMP (Current Good Manufacture Practice) which is
very much stringent to be complied by the new entrant specifically.


7. Business strategy

Incepta follows the integrated cost leadership/differentiation strategy

Because Incepta makes the various types of strategy for its each and every department. The
departments are as follows:
Human Resources Department
Finance & Accounts Department
Information Technology department
Marketing Strategy department
Production department
Supply Chain management department
Administration department
Quality Assurance department
Research and development department
Engineering department
Technical services department
Quality Control department

Some strategies are given bellow;

7.1 Recruitment & Selection Strategy

Incepta commits to promote best employment equality practice in its efforts to eliminate
discrimination and create working environments where are treated fairly and with respect.
However the Company believes:
Page | 5

To have a workforce that reflects the diversity of local communities and the believe that it
can best serve the citizens of the country;
All people should have an equal chance to apply for and be considered for jobs;
Harassment, bullying and discrimination are not acceptable;
Peoples differences should be valued.
Comply fully with and implement legal requirements and employment guidance;
Ensure all employees are aware of the Company's Employment Equality Policy Statement
through training and guidance;
Create working environments that promote fair and equal opportunities;
Develop, implement and publish plans for employment equality;
Monitor the existing workforce and job applicants to see if the policy is working and take
action to deal with under representation;
Regularly monitor and review all employment procedures and make changes to them
where they are found to be discriminatory.
Take seriously any concerns that an existing employee or job applicant raises about
discrimination, harassment or bullying.

7.2 Compensation & Benefits Strategy

Incepta Limited is committed about maintaining salaries and benefits that are fair to all
employees and competitive in the local market place. The management monitors changes in
the economy and salary market to ensure that the overall compensation package is sufficient
to attract, recruit and retain high quality staff within the financial capabilities of Incepta
Limited.

7.3 Strategy for production cost

Incepta has taken the following strategy for reduce the production cost.
(1) Sourcing better quality of raw material at the lower cost
(2) Take initiative to enhancing productivity
(3) Take initiative to minimize production process losses
(4) Take initiative to minimize wastage of finished product

7.4 Strategy for Distribution cost

Incepta has taken the following strategy to reduce the distribution cost. These are
(1) Develop smart distribution system
(2) Give training to distribution assistant to be more efficient.
(3) Update sales territory periodically.
(4) Use of fuel efficient vehicle to reduce the distribution cost.
(5) Take initiative to reduce the inventory cost.

7.5 Strategy for implementing technology
Incepta practice the following strategy to support the other department for smooth operation.
These are
(1) Implement new technology instead of legacy system
(2) Take initiative cost reduction program to reduce the IT cost

7.6 Selling Strategy
Incepta practice the following strategy to increase the sales in terms of taka and product
quantity. These are
Page | 6

(1) Take initiative to develop loyal customer
(2) Product diversification to enhance product basket.
(3) Give training to enhance selling and communication skill

7.7 Strategy for quality management

The Quality Assurance of consists of Quality Control, Quality Compliance and Quality
Surveillance. The main tasks and duties of Quality Control have been described in the
Quality Manual and relevant SOPs. The Head of Quality Assurance or his delegates are
responsible for releasing drug substances, excipients, dosage forms and packaging materials.

Quality Compliance is responsible for IPC, GMP co-ordination and training. Performances of
routine GMP checks are done as per need. Monitors to respect GMP regulation in the
manufacturing by instant checks of Batch Record completion, visual checks of cleaning of
working place, line clearance, performance checks of balance & other equipment.
Quality Surveillance is responsible for the implementation of the Quality Management
System in different areas in collaboration with different departments. Quality Surveillance
play active role in conducting external and internal audits with their follow-ups.
Research & Development is responsible for formulation development and method
development, implementing technical transfer to Production and Quality Control, and also
covers process validation, cleaning validation, method validation and follow up stability.
The Quality Manual describes how testing instructions are established and used. The testing
instructions include the specifications and testing methods. The testing instructions are
binding for release testing and for follow-up stability testing.
A routine inspection is being done in the name of "Self Inspection" mainly concerned with
safety, sanitation and infra-structural facilities leading to GMP including documentation.
Supply of raw materials is mainly obtained from approved suppliers. We select and evaluate
the supplier as per procedures. This procedure is also applicable in case of supply of Primary
and Secondary Packaging Materials.


7.8 Change Control Procedure

The Quality Unit along with other appropriate functions are responsible for coordinating
activity in their respective areas to ensure that there is an assessment of all proposed changes
and that approved changes are communicated to all affected parties. They are also responsible
for Change Control Procedures, documentation, evidence and continuous support and
maintenance for implemented changes.

All air conditioning system servicing production and service area required for room air-
conditioning and production processes are designed as per International Standard.

The "Site Validation Master Plan" describes the strategy on qualification and validation
covering Equipment Qualification, Process Validation, Cleaning Validation, Method
Validation, System Validation, Personnel Validation etc

Page | 7

Training is a routine function. The training needs depend on the function of the employee.
Departmental Manager and Supervisors define the training needs.
A medical policy (health) exists for the employees.


7.9 Corporate Social Responsibility (CSR) for maintaining relationships with customers

Incepta achieved its tremendous commercial success through its honesty and sincerity in
business policies. The company aims to become the Nation's most admired company through
its honest and intelligent approach. Company management strives to support community
where they live and also the nation as far as possible in times of need.

Incepta believes it can thrive only if the nation remains healthy. Incepta gives emphasis to its
practice of Corporate Social Responsibility (CSR) and evidence of this commitment is found
in its dealing with clients, suppliers, employees, Government's and the society at large.

Company CSR activity includes its finances because the company pays tax and VAT to the
Government and also settles bank and suppliers liabilities in a timely fashion and disburses
benefits to employees on time. Incepta considers its employees to be valuable assets and
protects their rights and provides a full range of staff facilities including life insurance and
disbursement of 5% of the company profit to them. Incepta maximizes safety in workplace
for its employees and child labor is strictly prohibited.

As its commitment to society the company donates medicine to the Government Relief Fund
during natural disaster. Incepta also provides financial assistance for expensive treatment
including heart and cancer and disburses its corporate Zakat for relief of distressed people
every year.

Incepta also produces life-saving "import-substitute medicines" at affordable price for the
people of Bangladesh as an expression of true love and compassion for the people. Incepta
strongly believes that commitment towards people and the society as a whole positively
contributes towards its business objective.


8. Some Competitive Advantages of Incepta

8.1 Equipment Facilities for R & D

Incepta have a separate Galenical laboratory for R & D, equipped with all the necessary
machineries & equipments of GMP standard in small scale for the team to develop products.

Analytical development is supported by Quality Control Department. Quality Control
Department is equipped with highly sophisticated instruments like UPLC, Gas
Chromatography, Atomic absorption spectrophotometer, FTIR, etc. A dedicated team is
involved in the development and validation of methods of API, raw materials & finished
products. A highly sophisticated microbiology laboratory has been setup to cater to the need
for quality control of regular products as well as control of all the different biological
products that the company produces.



Page | 8

8.2 Zirabo plant project

At the Zirabo plant the following activities are carried out
Pharmaceutical Manufacturing processing and packaging of pharmaceuticals to
supply to the local market and for Export to 3rd parties. Approved suppliers supply
the active substances used in manufacturing. Most of the auxiliaries used for
production are bought from approved third parties.
Logistics, Warehousing Storing of raw and packaging materials to meet the
requirements of production and also storing and dispatch of finished products as per
concept of Good Storage Practice of pharmaceuticals.
Engineering/Industrial Engineering In line with pharmaceutical production, health
safety and environmental protection, infrastructure maintenance, machinery and other
maintenance. Effluent treatment and safe disposal of pharmaceutical waste.
Quality Assurance/Quality Control Quality Control of pharmaceuticals, raw and
packaging materials, reagents and chemicals, plant and personnel hygiene, method
and process validation, and overall quality assurance of pharmaceuticals.
Research & Development Formulation development and adaptation for scale up
production with process validation,

9. Value Chain
Value chain of integrated cost leadership/ differentiation strategy is illustrated bellow;






Page | 9

10. Porters five forces model:

Rivalry with existing competitors:
Low cost position is a valuable defense against rivals as well as customers tend to be loyal
purchasers of products that are differentiated in ways that are meaningful to them. So, as
incepta follows integrated cost leadership/differentiation stategy Currently the Zirabo plant
consists of several building with state of the art technology. Dedicated cephalosporin
manufacturing building, a specialized manufacturing building for the production of
lyophilized products, insulin and amino acids and newly built liquid and semisolid
manufacturing building and large warehouse is also in operation to compete with the rivals.

Bargaining power of buyers:
Potential customers can force a cost leader to reduce its prices but customers are willing to
accept a price increase when a product still satisfies their perceived unique needs better than a
competitor offering can. So in that case, it offers wide range of products - more than 383
molecules in over 700 dosage forms and continually searches for ways to reduce its costs
relative to competitors.

Bargaining power of suppliers:
In this case, Incepta normally needs high quality of raw materials. So, it driving up the firms
cost. But as it is a brand, the high margins the firm earns in these cases partially insulate it
from the influence of suppliers in that higher supplier costs can be paid through these
margins. Sometimes it uses its power with suppliers to extract lower prices from them.

Potential entrance:
High technological equipment, skilled human resource, customer loyalty, and the need to
overcome the uniqueness of differentiated product present substantial barriers to potential
entrance.

Product substitutes:
With its brand name, it positions effectively against product substitutes.

11. Recommendation:
Strengthen norms, standards and policy options; promote quality of medical products,
vaccines and technologies.
Efficient procurement systems to combat counterfeit and substandard medical
products, vaccines and technologies.
Promote good governance and transparency in procurement and medicines pricing.
Strengthening capacity of drug administration authority.
Ensure equitable access, rational use and adherence to quality medicine
Monitor quality and safety of products/vaccines/technologies.
Establish Active pharmaceutical Ingredients (API) park, which could enable
Local pharmaceutical companies to produce raw materials.


12. Conclusion
Pharmaceutical companies provide both products and services. Incepta is the most known and
leading pharmaceutical company in our country. Behind every success or failure all activities
are considered the ultimate deciding factor. That is why Incepta always gives high priority in
the overall strategy practices. I think its business strategy in Incepta is competent and
effective enough, but if any problem arises then they should solve it in a proper way.