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INB 301

SECTION- 1

Report on
Cure Pharmaceuticals
Submitted by: The Incredibles
Nahela Tahsin Kabir 1420201
Md Kamrul Hasan 1420943
Tanay Saha 1421401
Sharmin Akther 1410002
Kaniz Fatima Nabila - 1330718
Contents
Executive Summary:...................................................................................................................................... 3
Company Profile:........................................................................................................................................... 3
Company Products: ....................................................................................................................................... 4
Globalization and its cultural aspects: .......................................................................................................... 5
Impact of global business operations: .......................................................................................................... 7
Global Expansion:.......................................................................................................................................... 8
S.W.O.T. Analysis: ......................................................................................................................................... 9
Challenges for International Business: ....................................................................................................... 11
International Business for Pharmaceutical companies: ............................................................................. 12
Cross border communication and managerial issue................................................................................... 14
Conclusion: ................................................................................................................................................. 15
References:.................................................................................................................................................. 16

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Executive Summary:

The biopharmaceutical industry contributes significantly to national, state, and local economies.
Recognizing this sectors contributions to state economies in terms of providing highvalue,
highwage, revenuegenerating jobs, the Pharmaceutical Research and Manufacturers of
Cure Pharmaceuticals commissioned Battelle to conduct this study to examine the extent to
which the industry can expand its operations in global market. It highlights some effective
approaches that the company needs to consider to expand and develop their own economic
development and innovation strategies. The report describes how culture varies greatly in
different parts of the world and how it affects the company. It also includes the degree to which
state governments haves been involved in nurturing the growth of the industry. It also documents
the economic value this sector offers and describes a range of policies that states can employ to
create a climate favorable to sustaining and growing this sector.

Company Profile:

Cure Pharmaceuticals is a leading company for manufacturing world-class and top-quality


pharmaceutical products in Bangladesh. We are currently producing more than 500 products in
different dosage forms covering broader therapeutic categories which include anti-infective,
cardiovascular, ant diabetics, gastrointestinal, CNS, respiratory disease etc. among many others.
The success in local market prompted us to explore the international market. Through the
outstanding knowledge, professionalism and commitment of more than 7,000 employees, we are
consistently building upon our facilities, capabilities and also portfolio to meet the growing
health care needs.

We are united, inspired and fuelled by our mission to ensure health vigor and happiness for all.
Our company was founded in 2000 and we have been committed to offering solutions to our
most pressing health care needs. More than 10 years later, we remain true to our founders vision
and values to produce high quality medicines with integrity, customer focus, pro-activity, team
spirit, excellence and desire to win and responding to social and environmental needs. Over the
past few years, we have seen an amazing growth and success in pharmaceutical sector. With
more than 10 years of expertise in medicine and science, our company draws upon a rich legacy
of high quality formulations and a robust pipeline of promising generic medicines at affordable
price to meet the health care needs.We take care to deliver rigorous management of quality
throughout all processes to ensure that appropriate standards are maintained until the final
product is received and beyond.

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Mission Statement: Our mission is to ensure health and provide the highest level of
satisfaction to its customer through producing world-class product, innovative process, and
empowered employee and expending in the local and global market.

Vision Statement: To be the leader in the pharmaceutical industry.

Affordability: We are committed to offer cost effective solutions by having a thorough


understanding of each market and its requirements.

Company Products:

Cure pharmaceuticals is running its operation in the market with 824 generic products or
medicine of three broad categories Human is 561, Veterinary is 128 products respectively. We
are constantly expanding and improving our product line. The following items are our most
recent additions.

The bestselling products of the human and veterinary categories are:

Human Veterinary

Antibiotics TRIZON LT-Vet

CIPRO-A Benazol

SEFRIL HEpatovit

AZIN Zymovet

FIX-A A-Sol

Cardiovascular AMLOPIN

Vitamins and Minerals Nutrum Gold

Baby Zinc

Rahidin

PPI

Oxecone

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Reason behind global expansion: The planned expansion of a company's business
activities into countries in several regions throughout the world. Global expansion implies more
than just making investments in nations outside of the company's home; the concept includes
maintaining an actual business presence in those countries.

Sales Expansion: The first and most foremost reason for taking our business to another
country is the opportunity for increased sales volume. There are literally billions of consumers
abroad and surely not everyone who wants or needs our product/service has access to it. How
much profit our business can generate in a foreign economy will depend on a number of factors
but to think that we can realistically increase sales by adopting a global strategy is as good as
guaranteed.

Cost Saving: The second reason to engage a foreign market is the opportunity for substantial
cost savings. Whereas our business is heavily manufacturing based, then were almost certainly
aware of the cost savings potential available to businesses that manufacture in countries where
real estate and labor are cheap, such as China. Setting up a cheap production facility could also
enable us to test selling our product in a foreign country prior to initiating a full blown global
strategy.

Market Diversity: To minimize our risk our company will expand business internationally.
So we dont have to depend on the economy of one country. Companies engaged in international
business can protect their investments and their markets by dealing with countries in a variety of
countries. A recession in one county wont have a huge effect if business is doing well in another
country.

Globalization and its cultural aspects:


Globalization is a complex and multifaceted phenomenon. It is the process of international
integration as a product of exchange of world views, products, ideas and other aspects of
culture in which worldwide exchange of national and cultural resources occurs in the process.
Many factors contributed for the growth of globalization major being advancement in
transportation and communication. The current wave of globalization is nothing but the result
of Schumpeterian evolution in technology along with interaction of many actors at different
levels of the economy. Globalization has changed situations in such a manner that power of
state is determined by power of firm.

Globalization is not an instant movement. It is a culmination of long term process. According to


scholars, they divide the entire process of globalization into two phases:

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First stage of globalization 18701940
Second stage of globalization from 1970s

International trade patterns:

There was a sharp increase in the case of international investment in second stage than the first
stage of globalization. In the first stage of globalization, the stock of Foreign Direct Investment
(FDI) was 9% in 1913. When we look into the second stage, there was a rocket speed increase
in investments. FDIs increased from 68 billion in 1960s to 636 billion in 1980s which later
shoot up to 6000billion in 1990s. There was an increase in FDI of 4% in 1960s to 20% in
2000. These increases were definitely due to the increased interference of Transnational
Corporations (TNC) across the world.

Capital flow:

The pharmaceutical industry is the country's second largest tax payer. The annual per capita
drug consumption in Bangladesh is one of the lowest in the world. However, the industry has
been a key contributor to the Bangladesh economy since independence. With the development
of healthcare infrastructure and increase of health awareness and the purchasing capacity of
people, this industry is expected to grow at a higher rate in future.

Besides, out of the total domestic requirement of medicines almost 95 per cent is met by the
local manufacturing and Bangladesh also exports formulations to 27 countries around the
world. The current turnover of the industry in Bangladesh is Tk. 3,000 core. Turnover from
pharmaceutical sector is encouraging which is about 14% of total industry turnover is. This
position also indicates the positive sign for investment in pharmaceutical sector. The
pharmaceutical sectors overall sales crossed TK 4,000 core in 2008 for the first time,
registering a record double-digit growth by many of the countrys 258 companies. The largest
barriers to regulated markets are manufacturing facilities which come at a cost of at least $50
million and know-how. Pharmaceutical firms in Bangladesh export approximately $27.54
million in products to 68countries.Export figures would have been higher if the country had not
gone through a political crisis. Manufacturers in an API Park can produce raw materials needed
by the medicine makers.

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Impact of global business operations:
The proponents of globalization claim that it will lead to convergence of income, access to
knowledge and technology, consumption power, living standards and political ideas. Adding
onto that, integration of economies would lead to increase in economic growth and wealth.
They also argue that more people would be able to enjoy the fruits of modernization and
civilization. Critics of globalization argue that it is hegemonic, antagonistic to the poor and
vulnerable and is weakening local and national economic communities and the environment.
Therefore globalization has both positive and negative impacts.

Globalization brings new potentials for development and wealth creation. Globalization has
increased the problems of unemployment, inequality and poverty. The goal of globalization is
to meet the need of people thereby increasing their standard of living, freedom and liberty and
thereby a prosper life. But today, globalization has increased the gap between rich and poor and
has led to the marginalization of certain sections of the society. The developed countries are the
one much benefited out of the entire process as there was an increase in exports, increased trade
between developing countries where they always had a comparative advantage, increased
presence of western based multinational companies which squeeze the labor and wealth from
these countries etc.

The global climate change along with extinction of many species can be attributed to the
globalization to a great extent. Though the international organizations have fixed the limits of
carbon emission and other pollutants, it is still pro developed countries that hamper the growth
of developing countries. As there is a skill biased technological change, the increased import of
capital goods will lead to increased inequality. Increased trade was meant to foster economic
growth but today what we see is a one sided benefitting deal.

Though globalization has expanded womens access to employment it has not done much
considerable to reduce the gender inequality. Also, due to the influence of media and other
socio-political-cultural aspects, the crimes against women have increased considerably.
Another major social aspect is that globalization has deeply influenced the social structure of
different societies.

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Global Expansion:
Cure pharmaceuticals plans to increase their market share, according to our market demand two
of the most suitable options are Russia and Turkey.

Russia: Russia is 8-th largest pharmaceutical market in the world, where almost 80% of products are
imported. According to the Federal target program "Development of the pharmaceutical and medical
industry of the Russian Federation", the following goals have been set, to be achieved by 2020:

The share of Russian-manufactured medicines in the list of strategic medicines and vitally
important medicines must reach 90%.
The share of local medical drugs in the pharmaceutical market in monetary terms must be 50%.
The share of local medical products and medical equipment in monetary terms must be 40%.
75% of pharmaceutical and 85% of medical companies should be modernized.

Turkey: Some key facts and figures in the Turkish life sciences sector include:
Research and development and the discovery of new medicinal products;
Raw material production: the manufacturing of medicinal products or exported to other
countries;
Pharmaceutical manufacturing: the effective manufacturing of human use medicinal
products and medical devices in Turkey;
Wholesale: selling the pharmaceuticals to pharmacies and others;
Retail (Com16)

Selection:
According to the data above investing in to Russia is better option than in Turkey. The reason
why Russia seems like a good market to take advantage of is, around 74% of the Russian
Federation pharmaceutical market is supplied by imports. Healthcare in Russia remains in a poor
state. Public hospitals and polyclinics face severe funding shortages, although some facilities
have been upgraded under the national health project; so far, R16 billion (US$0.6 billion) has
been spent on the procurement of medical devices and pharmaceuticals. Relying heavily on
imports, the 1998 economic crisis left Russia with severe drugs shortages. Despite continual
funding difficulties, the federal drug supply system (DLO) introduced in January 2005 has made
the industry more competitive and has acted a gateway for foreign companies to enter the
market.

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Economy:
Russia ranks among the lowest in the world for household debt: 8 percent of GDP. The Western
average is 90 percent. In addition, Russia's government debt is also low, at 7 percent. Russia
holds the third-largest hard currency reserves in the world, at $510 billion. The unemployment
rate, at 5.4 percent, is one of the lowest in Europe.

Health:
While Russia has more physicians, hospitals, and health care workers than almost any other
country in the world. About 16 million Russians suffer from cardiovascular diseases, placing
Russia second in the world, after Ukraine, in this respect. More than 260,000 lives are lost each
year as a result of tobacco use.
HIV/AIDS, virtually non-existent in the Soviet era, rapidly spread following the collapse, mainly
through the explosive growth of intravenous drug use. Officially there are currently more than
364,000 people in Russia registered with HIV.

S.W.O.T. Analysis:
It will be divided in two parts, internal and external. Strength and weaknesses will be considered
as the internal part of the analyses. On the contrary opportunity and threats will be considered as
external factors affecting the process.

Strength
Quality:
Bangladesh pharmaceuticals industry is well known for its products. Moreover cure
pharmaceutical is a well reputed organization. Bangladesh is exporting these pharmaceuticals
products to many parts of the world. So it is really a positive sign for this industry, as they are
already well known for its high quality products. Cure is already exporting pharmaceuticals
products to some countries so we are known with the exporting criterion. It will help us to enter
into a new market with regard to the international quality standards.

Low Price:
Lower production cost one of the other strengths our several industries have. As a LDC
Bangladesh can manufacture and export pharmaceutical products without patent until2016. This
gives us a great advantage over other exporting countries. This actually pulls down the cost. This
absence of the patent costs ultimately lowers the price of the products that gives our
pharmaceuticals industry a huge benefit over others competitors. Moreover Bangladesh is still
known for low wages of labor. That generally brings down the labor cost, thus reducing the cost
of production. Since the cost of production is lower than many other foreign competitors, Cure
Pharmaceuticals can afford to charge lower price even after the costs involved with exporting.

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Human Resource:
Cure Pharmaceuticals has a total of 2600 employees at its disposal. This proved to be sufficient
for its successful production and distribution of products across the country and also exporting
them. Perhaps few more personnel will be needed to handle the export to Russia, but it does
seem sufficient enough.

Weaknesses
Lack of skilled workforce:
The pharmaceutical industry of Bangladesh is still in a growing phase. There is shortage of
trained and skilled professionals which are essential for maintaining the standard in production.
It is essential that education level of the country is increased and social infrastructure for
growing industries like RMG, pharmaceuticals is created. This should deliver workers specific
for this industries, thus increasing efficiency.

Corruption:
Corruption has been the curse for our country for ages. Corruption is indirectly affecting our
exporting sector of pharmaceutical industry. The inefficiency and corruption of government
officials could slow down the process of exporting. That will only frustrate the involved parties
and be too much of a burden for many corporations.

Political Condition:
The political instability of our country can also hamper the performance and image of the
pharmaceutical industry. Riots, strikes, and political unrest will only hamper the production and
exporting process. A deadline could be missed because of such incidents. Although under caretaker
government the condition is quite stable at the moment, but political condition in Bangladesh is like a
ticking time bomb, it could explode any time.

Port:
Corruption, inefficiency, conflicts and strikes have also engulfed the most important port of Bangladesh,
Chittagong Port. It takes 9 to 10 days to load and unload a ship as opposed to international standard of 2
to 3 days.

Opportunity
Demand for Imported Pharmaceutical Products:
Around 74% of the Russian Federation pharmaceutical market is supplied by imports. The global
pharmaceutical markets will more than double in value to $1.3 trillion by 2020. Russia and Turkey could
account for one fifth of global pharmaceutical sales, according to PwC report. Growth of the markets in
those countries is driven by soaring demand for medicines and preventative treatments as the
population grows, ages and becomes more prosperous.

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Cost of Production:
Germany, India, U.S.A and France are the main exporter of medicines to Russia. But the main
problem of these countries is that their cost of production is significantly higher than that of
Bangladesh. In addition to that they have to consider the cost of patent. Bangladesh and other
LDCs are at a better competitive position in these terms.

Threats
Competitors:
Competitors can be also threats to our new export. Indian pharmaceuticals are our main
competitor since cost of production will be quite similar to ours and their facilities are better.
European companies might have higher cost of production but their companies are still major
players in Russian pharmaceutical industry. Sanofi-Aventis and Berlin-Chemie/Menarini Group
the two European corporations, are the market leaders in Russia.
The Pharmstandart holding, which is the best of the Russian producers, is among the five leading
companies, and Dr. Reddys Laboratories Ltd., the Indian pharmaceutical company leading in
the volume of sales, is among the 20 leading companies on the Russian market.

New possible policies:


Russian government has intent to tighten the regulations regarding pharmaceutical imports.
However, Vladimir Putin opposed this movement in past since Russia is looking to enter WTO,
so trade liberalization policies are needed to be adopt.

Corruption:
Russian political leaders and bureaucrats are getting known for higher level of corruption. This
will affect the trades in that country adversely. The process involved with imports will be
delayed. This red tape needs to be removed in order to achieve smooth and efficient trades.

Challenges for International Business:


The main challenges for drug companies come from four areas. First, they must deal with
competition from within and without. Second, they must manage within a world of price controls
that dictate a wide range of prices from place to place. Third, companies must be constantly on
guard for patent violations and seek legal protection in new and growing global markets. Finally,
they must manage their product pipelines so that patent expirations do not leave them without
protection for their investment.

Competition:
The pharmaceutical industry currently represents a highly competitive environment. One can
distinguish three layers of competition for pharmaceutical companies:
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First, obviously, companies compete among themselves. Although not all leading pharmaceutical
companies cover all segments of pharmaceutical market, almost all of them are active in R&D
and production of drugs in the segments with the highest potential such as treatment of
infectious, cardiovascular, psychiatric or oncology diseases.

Secondly, companies experience significant profit losses due to competition from the generic
drug manufacturers. Opposite to the research-oriented pharmaceutical companies, which invest
significant financial resources and time to develop new medicines, generic drug manufacturers
spend minimum resources on R&D, and start manufacturing already developed by other
companies drugs after their patent expiration. Because generic drug manufacturers do not have to
recoup high R&D costs, prices of their products are usually much lower than those of major
pharmaceutical companies; as the result, after patent expiration, generic drugs manufacturers
capture significant market share, dramatically decreasing revenues of the companies.

Finally, the whole pharmaceutical industry competes with other health care industries. In this
case, pharmaceutical companies should not only demonstrate high efficiency of their products,
but also provide obvious proof of cost advantages in comparison with other forms of care.

Price control:
Pharmaceutical companies have to operate in a highly regulated environment; the degree of regulation to
a significant extent depends on the country and type of the product. One of the most important aspects of
government regulation for pharmaceutical companies is price regulation, and different countries have
different policies on this issue. The majority of European countries control drug prices, and this
downward pressure on prices has been increasing during last years as the result of price control, prices of
the same products can significantly differ in different countries.

International Business for Pharmaceutical companies:


Southeast Asia and Africa are traditionally Bangladesh's major markets for generic drug exports,
leading companies have now focused on advanced markets. At least five companies successfully
entered the European market and received good responses from the buyers. We need adequate
support from the government to develop the API Park to make our medicines more competitive
in global markets, Demand for Bangladeshi pharmaceutical products is growing in Asia, Africa
and European markets as manufacturers follow international standards that ensure better quality.
Bangladeshi medicine makers meet 98 percent of domestic demand and export to 88 counties.

Compulsory Licensing and Contract Manufacturing:


For countries where pharmaceutical patent has come into-effect from January 01, 2005,
compulsory licensing is neither a practical nor a feasible option to meet national emergencies.
In case of National Emergencies, it may take 2 to 3 years to get the products through
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Compulsory Licensing because the generic manufacturing company, after getting the
permission to manufacture patented products from Drug Authority, have to go through all the
processes to introduce the products.
In such situation, Bangladesh could be an ideal candidate having all the manufacturing
facilities and well developed formulation R&D that could be utilized for immediate
manufacturing of the patented lifesaving molecule using compulsory licensing.
Bangladesh has all the infrastructure & facilities to be an ideal place for contract
manufacturing. It has state-of-the-art manufacturing facilities, highly educated & skilled human
resources, sophisticated & cutting edge quality control laboratories. It can manufacture highest
quality products conforming to all international standards like British Pharmacopoeia (BP),
United States Pharmacopoeia (USP), European Pharmacopoeia (EP) and any other recognized
standards. Equipped with the most advanced technologies & following GMP standards,
Bangladesh Pharmaceutical Industry can cater to any healthcare need of all concerned.
Since Bangladesh has abundant and cheap labor force, the cost of contract manufacturing
would be highly favorable compared to any other countries of the world.

Joint-Venture Investment Opportunities:


Bangladesh has a very big market for Active Pharmaceutical Ingredients (APIs), excipients and
intermediates. Although it is self-sufficient in formulation drugs meeting 95% of countrys
demand it still depends largely on imported bulk drugs. Around 80% of Bangladeshs total
need of API is being met through import. Under TRIPS agreement Bangladesh will enjoy
manufacturing patented drugs until 2016. Since most of the countries of the world will not be
able to manufacture patented drugs after 2005, there exists an excellent opportunity for foreign
investors in bulk drug manufacturing in Bangladesh. They will be able to cater to growing bulk
drug need of Bangladesh as well as 49 such other patent exempted countries of the world.
Since India and China have very good expertise in API and formulation R&D, they may like to
manufacture the APIs outside their countries as they cannot manufacture these patented APIs
in their countries after 2004.
Because of cost advantage, large pharmaceutical companies of highly regulated markets are
now going for joint venture projects. Bangladesh also has enormous opportunities to go for
joint ventures with these large global companies for manufacturing pharmaceutical finished
products.

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Cross border communication and managerial issue
Development proposal for cross border communication: When we set our company in the
foreign country we should develop our proposal of cross border communication such as:

Harmonize of our system and knowledge


As much as increase the face to face communications
Increase the common international seminars and other events
Frequent use of videoconferences
We have a common contact portal
Responsibility for cross border communication to the highest authorities

Beside these more personal contacts and common events would be needed in order to enhance
cross border communication.

Our strengths of cross border communication: Cross border communication provides us


flexible possibility for information change. When the information changes are for instance we
find latest research results, technological innovations and exchange of our experiences.

Effective cross border communication and collaboration are becoming critical to the financial
success of companies with the international aspirations. When we focus on our international
growth of product we face some critical factors and sometime communication is costly.

Communication skills of our employees: Difference in language and culture make it difficult to
gain a foothold in unfamiliar markets. We offer enough training to our home employees on
language and communication skills and we have enough emphasis placed on selecting employees
who are suited for multi culture environments.

Employees to be fluent in key foreign language:


We believed that our workforce will need to know English if we want to succeed in international
expansion plans. Because employees language skills reflected in our companies hiring strategies
.we expect from our workforce to be fluent in at least one non-native language.

Misunderstanding is greatest obstacle to productive cross border collaboration:


If we are going to be a global company, we simply cannot progress without the knowhow and
experience to deal with other culture.

Impact of managerial issue: If we become part of multicultural global community, we have to


frequently encounter cultural differences which can interfere with the successful compilation of
our business. Foreign countrys value system affects our human thinking, feeling and acting and

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the behavior of our business in predictable way. The dimensions impact of managerial issue can
be grouped into several ways.

Relations between people:

Individualism and collectivism impact managerial issue. Our managers have been used to
manage our group of employee who shared the same norms, values and basic assumption in life.
Our behavior is always an expression of our values so when we are managing foreign employees
from a different culture, managers should understand foreign countries behavior and norms.

Attitudes toward time:


Long term vs. short term orientation attitudes also impact our business. We accept delayed
gratification of foreign county material, social and emotional need. If we want long term
business it accustomed to working toward building strong position in foreign market. Our
managers are allowed time and resources to make their own contribution.

Conclusion:

From the data discussed above, it is clear that Cure Pharmaceuticals has a good opportunity to
expand its business in Russia and if the cross-border issues minimized or avoided, it can make
profit that will help to improve Bangladeshs economy and make better medicines available to
many countries at an affordable rate also to ensure health and provide the highest level of
satisfaction to its customer through producing world-class product, innovative process, and
empowered employee and expending in the local and global market.

First, they must deal with competition from within and without. Second, they must manage
within a world of price controls that dictate a wide range of prices from place to place. Third,
companies must be constantly on guard for patent violations and seek legal protection in new and
growing global markets. Finally, they must manage their product pipelines so that patent
expirations do not leave them without protection for their investment.

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References:
(Aristopharma Ltd., 2016)
(Invest In Russia, 2016)
(Nisula, 2011)
(Com16)

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