Submitted To

Prof. Dr. Mahmodul Hassan

Faculty of MBA & EMBA Program
American International University, Bangladesh

No. Name ID Signature

1 Haque,Kazi Mahfuzul 12-95395-1
2 Arif, Md Rezwanul 14-97434-1
3 Shafi, Sayeed Abrar 14-97864-2
4 Mondal Sharmistha 14-97481-1
5 Abbasi Md. Rashidun Afsar 13-97291-3

DATE OF SUBMISSION: 19th April, 2015

19th April 2015

Prof. Dr. Mahmodul Hassan

Faculty of MBA & EMBA Program
American International University, Bangladesh

Subject: Submission of Term Paper on Acme Pharmaceuticals.

Dear Sir,
With great gratification we are submitting our term paper on “Acme
Pharmaceuticals” that you have assigned to us in your Strategic Management course
for MBA program this spring, 2014-15 at AIUB. It is really an enormous prospect for us
to congregate vast information and grasp the subject matter in an appropriate way. We
have found the research activity quite interesting, beneficial & insightful and tried our
level best to prepare an effective & creditable report.

Our anticipation will assist to provide a clear idea about the Acme Pharmaceuticals. And
through extensive secondary and some primary research we have gathered the necessary
information that would facilitate the strategic analysis of the Company and their overall
functioning. Through systematic analysis, we have formulated a set of key
recommendations which Acme Pharmaceuticals may adopt for strategic planning and
implementation which will be worth for all the labor we have put in it. We welcome your
entire query & take pride to answer them.
Sincerely yours,

No. Name ID Signature

1 Haque,Kazi Mahfuzul 12-95395-1
2 Arif, Md Rezwanul 14-97434-1
3 Shafi, Sayeed Abrar 14-97864-2
4 Mondal Sharmistha 14-97481-1
5 Abbasi Md. Rashidun Afsar 13-97291-3
 Letter of Authorization
19th April, 2015

Dear Reader,

This report has been conducted to fulfill the course requirement of Strategic
Management of the American International University, Bangladesh. This is a secondary
research work done by us. As a result, before using any information or data of this
report, permission is strictly required from us. The authorization of this report is valid
until any further notice from us.

Thanks for your time.

Sincerely,

No. Name ID Signature

1 Haque,Kazi Mahfuzul 12-95395-1
2 Arif, Md Rezwanul 14-97434-1
3 Shafi, Sayeed Abrar 14-97864-2
4 Mondal Sharmistha 14-97481-1
5 Abbasi Md. Rashidun Afsar 13-97291-3
 Executive Summery

Strategy is the direction and scope of an organization over the long-term: which
achieves advantage for the organization through its configuration of resources within a
challenging environment, to meet the needs of markets and to fulfill stakeholder
expectations. The name of term paper is “Term Paper on Acme Pharmaceuticals”. ACME
is one of the leading pharmaceuticals company in Bangladesh. The drug market of
ACME is possessing huge market shares in Bangladesh ACME laboratories. The ACME
is a local and export oriented Pharmaceuticals Company situated at Dhaka, incorporated
as a proprietorship firm in 1954.

Strategic management of Acme Pharmaceuticals involves strategy development, which

is comprised of five stages of modern strategic management theory (2011-2015±).
PESTEL analysis stands for "Political, Economic, Social, and Technological,
Environmental and Legal analysis" and describes a framework of macro-environmental
factors used in the environmental scanning component of strategic management. SWOT
Analysis of ACME Pharmacy. In BCG matrix Acme’s position is in dogs. Bangladeshi
firms generate 82% of the market in pharmaceuticals; locally based MNCs account
for 13%, and the final 5% is imported. The top 30 to 40 companies dominate
almost the entire market; the top 10 hold 70% of domestic market share; and the
top two, Beximco and Square, capture over 25% of the market. Acme has 3%
market share in the pharmaceutical industry. The industry structure is relatively
concentrated. EFE matrix of Acme Pharmaceutical weighted score is 2.75 which is one
average.CPM analysis of pharmaceutical Industries is 3.15 which indicate minor
strength of Acme pharmaceuticals. In Break even analysis If ACME wants to make a
target profit, it must sell more than 208,333 at Tk. 14 each. If ACME invested Tk.
40,00,000 and wants to set price to earn a 20 percent return or Tk. In QSPM analysis of
Acme Pharmaceutical we focus the strategy in globally one is Alternative 1(Exploration
in South Asia) another one is Alternative- 2 (Exploration in North America). We choose
Alternative-1.Because the Total Attractive score of alternative-1 is 5.10 and Total
Attractive score of alternative-2 is 4.95. Total Attractive Score of alternative-1 is greater
than the Total Attractive score of alternative-2. That’s why we choose Alternative-1.
 Table of Content
Page No
Chapter 1 Definition of Strategy 01

Chapter 2 Company detailed profile and Mission & Vision 02-05

Chapter 3 Strategic Management Model 06-13

1) PESTEL Analysis
2) Porter’s Five Forces
3) SWOT Analysis

Chapter 4 1) SWON Analysis 14-15

2) TOWS Analysis

Chapter 5 Value Chain Analysis 16-18

Chapter 6 1) SMARTER MODEL 18-21

2) GREAT Model

Chapter 7 Visa Model & PURE objective 21-24

Chapter 8 The BCG Chart 25-26

Chapter 9 Market analysis including Market segmentation 26-28

Chapter 10 1) EFE matrix 29-31

2) CPM matrix
Chapter 11 Financial Analysis 31-32

Chapter 12 Competitor Analysis 32-34

Chapter 13 1) Break Even Analysis 34-38

2) QSPM Analysis

Chapter 14 KSF analysis 38-39

Chapter 15 1) Strategy evaluation 40-43

2) Contingency plan

Chapter16 Recommendation 44

Chapter17 Conclusion 45

Chapter 18 References 46
Definition of Strategy
Strategy is the direction and scope of an organization over the long-term: which
achieves advantage for the organization through its configuration of resources within a
challenging environment, to meet the needs of markets and to fulfill stakeholder
expectations.

Strategy is often the difference between:

 success and failure, between mediocrity and excellence

 a great manager and average managers
 stumbling through life and moving ahead with purpose

Strategic Management (Theory : 2000 – 2010)

• Strategic Management can be defined as (1) the art and science of formulating,
(2) implementing, and (3) evaluating cross-functional decisions that enable an
organization to achieve its objectives.
• Strategic Management focuses on integrating management, marketing,
finance/accounting, production/operation, research and development (R&D) and
computer information systems to achieve organizational success.

Strategic Management (Theory : 2011 – 2015 ± )

• Strategic management involves strategy development, which is comprised of five

stages:
1. discovery,
2. strategic thinking,
3. strategic planning,
4. strategy roll-out,
5. Strategy tune-up/adjustment.
Company Detailed Profile including Mission & Vision

ACME is one of the leading pharmaceuticals company in Bangladesh. It is one of the top
most pharmaceuticals companies that have large contribution in the society and
controls. The drug market of ACME is possessing huge market shares in Bangladesh
ACME laboratories. The ACME Laboratories Ltd. is a local and export oriented
Pharmaceuticals Company situated at Dhaka, incorporated as a proprietorship firm in
1954. The founder of the ACME organization was late Hamidur Rahman Sinha. The firm
was converted into a private Limited company in the year 1976. Commercial operation
at the modernized plant equipped with sophisticated and advanced facilities began
toward the end of 1983. Many challenges were overcome successfully to transform the
company from a small unit to what it is today.

ACME Pharmaceutical is one of the leading and diversified global conglomerates in

Bangladesh, with offices in all major cities, employing over 3000+ employees and
dedicated to bringing the highest quality products and services to our customers. We
have an annual turnover of US $60 million with diversified interests in Pharmaceuticals,
FMCG, Information Technology Services, Aviation Services, Printing & Packaging
Services, Trading Services, C & F Services, Apparels and more. The conglomerate has an
outstanding record of all around excellence and growth in the relevant business
activities.
The ACME Laboratories Ltd, the pharmaceutical major and the flagship Company of the
ACME Group, is a Manufacturer and Global exporter of Human, Herbal and Veterinary
Pharmaceutical products. Our comprehensive Product List ranges from Antibiotics to
Histamines to Vitamins. Certifications include: ISO 9001:2008.
The ACME Laboratories Ltd. continuously seeks to expand its production facilities, add
employees and increase its sales and marketing efforts. According to the latest statistics,
out of about 300 Pharmaceutical companies in the country, The ACME Laboratories
Ltd. is one of the top four.
Vision

A vision statement is the statement or the outline that a company wants to achieve
trough the business. Vision statement sates the purpose and the values of the company.
ACME pharmaceuticals have its individual vision that they want to achieve. The vision
of ACME is to ensure “Health, Vigor and Happiness for all and is on a
Perpetual quest for excellence.”

Mission

Our holistic approach is to ensure Health, Vigour and Happiness for all by
manufacturing ethical medicines of the highest quality at affordable prices and
expanding in the local and global market. We view ourselves as partners with the
doctors, healthcare professional, all other customers, our employees and harmonize
with environmental issue.
Company Organogram

Chairman

Managing Director

Deputy Managing Director Deputy Managing Director

(ARS)

Directors

Fig: Board of Directors

Strategy of Acme Pharmaceuticals

Strategic management of Acme Pharmaceuticals involves strategy development, which

is comprised of five stages of modern strategic management theory (2011-2015±)
1. Discovery: Their company strategy, at the core, is based on a diversified
approach to the business – one that does not rely or depend on any particular
product type, geology or geography. Their diversified portfolio has helped them
continue operating long-term business without the need to react to short-term
market volatility. With a steady stream of production from legacy assets,
conventional and unconventional opportunities in development drilling
programs, major project startups across the portfolio, and an extensive inventory
of exploration prospects, they are well positioned to deliver organic growth. They
believe this is the right formula for a company of our substantial size.

2. Strategic Thinking: They run their business under a set of guiding principles
that are called their SPIRIT Values. These set the tone for how they behave with
all their stakeholders, internally and externally. They are shared by everyone in
their organization, distinguish them from competitors and are a source of pride.
 Safety- They operates safely.
 People- They respect one another, recognizing that their success
depends upon the commitment, capabilities and diversity of their
employees.
 Integrity- They are ethical and trustworthy in their relationships with
stakeholders.
 Responsibility- They are accountable for our actions. They are a good
neighbor and citizen in the communities where we operate.
 Innovation- They anticipate change and respond with creative
solutions. They are agile and responsive to the changing needs of
stakeholders and embrace learning opportunities from their experience
around the world.
  Teamwork: The “can do” spirit delivers top performance. They
encourage collaboration, celebrate success, and build and nurture long-
standing relationships.

3. Strategic planning: Acme Pharmaceuticals remain committed to our 5 strategic

priorities:

 Maintain a relentless focus on safety and execution.

 Offer a compelling dividend.
 Deliver 3 to 5% compound annual production growth.
 Deliver 3 to 5% compound annual margin growth.
 Achieve ongoing improvements in financial returns.

4. Strategy roll-out: To achieve these goals we continue investing in projects and

programs that deliver long-term production and margin growth. In 2013, we
funded a $16.3 billion capital program for continuing operations and prepaid a
$2.8 billion obligation to our 50% owned FCCL business venture. The 2013
budget allocated approximately 10% of this capital toward maintenance of our
legacy base assets, 45% to development drilling programs, 30% for major growth
projects, and 15% for exploration and appraisal programs. We expect our 2014
capital to have roughly the same allocations.

5. Strategy tune-up/adjustment: If the plan is not according to the schedule

then they evaluate it and adjust for the betterment and this continuous process of
improvisation remains present all the year.

Most Strategic Management Models

PESTEL analysis:
PESTEL analysis stands for "Political, Economic, Social, and Technological,
Environmental and Legal analysis" and describes a framework of macro-environmental
factors used in the environmental scanning component of strategic management.

PESTEL ANALYSIS

POLITICAL ECONOMICAL

 ACME Pharma has a long-standing  ACME Pharma common stock is listed

commitment to comply with the law
wherever they operate and to conduct
all business activities with the highest
ethical standards which is critical for
their continued success in the global
marketplace.
 The ACME Pharma governance body
ensures the company serves the
interests of shareowners and other key
stakeholders with the highest standards
of responsibility, integrity and
compliance with all laws.
 Customers, community groups,
political organizations and others
regularly approach ACME Pharma to
support civic and political activities.
 Growing political focus and pressure on
healthcare.
 Government interest in ensuring
healthcare for all and solicit savings
 Harmonization of healthcare across the
industry
on the Dhaka Stock Exchange (DSE).
 The Board places a premium on
aligning the interests of executives with
those of the Company’s stockholders.
The Human Resources and
Compensation Committee shall adopt ,
and annually monitor compliance with,
stock ownership guidelines applicable
to directors and senior executives
 Global economic crisis
 Reduction in individual disposable
income
 Increased number of buying groups
putting pressure on price
 Reluctant of consumers to spend in
healthcare
 Increased pressure from shareholders

SOCIAL/SOCIO-CULTURAL TECNOLOGICAL

 Patient awareness and changing  They continue applying new

expectations technology and fresh medical
 Increasing age of population and knowledge to both enhance existing
 growth in obesity.
 Market likely to grow with
increasing health concerns
 Patient public and social media
activism is also increasing through
networking technologies.
 Increased need of customer service
and price transparency.
 They consider their people are their
most important asset and the key to
their success. That’s why they
respect one another, and
consistently demonstrate honesty
and commitment in their words and
actions.
 By demonstrating visible and active
leadership in communities where
they operate, ACME Pharma creates
and maintains inclusive, honest,
and mutually-beneficial
relationships with those who are
impacted by their business or who
have the ability to impact their
business.
ECOLOGICAL/
ENVIRONMENTAL
 Change to advertising law
 ACME Pharma implement high 
environmental standards in order to 
ensure that their actions today will 
not only provide the energy needed
to drive economic growth and social
well-being, but also secure a stable
and healthy environment for
tomorrow.
 Growing environmental agenda and
community awareness
 Identify eco opportunities in the
market
 Market demand of herbal products
resource.
 Customized treatment
 Direct to patient advertising
 Direct patient communications
 More responsive service facilities
 Developing and applying innovative
technology is a key component of
their future success and social
license to operate. They focus on
applying the most leveraging
technologies where they can create
the most value, anticipating change
and responding with creative
solutions.
LEGAL/ REGULATORY
Increased litigations
Quality become the key
Key ACME Pharma operating policies
include:
•Code of Business Ethics and
Conduct
•Health, Safety and Environmental
Policy
•Political Support Policy and
Procedures
•Political Contributions
•Substance Abuse Policy
 Five Forces Model

Porter’s Five Forces Analysis

As we know, Michael Porter’s analysis of five primary competitive forces is the key to
analyze the state of competition in the industry. Following are the brief of the
competitive forces that contribute to shape pharmaceutical business in Bangladesh.

Rivalry among competing sellers:

The competition among companies in this industry ranges from moderate to high.
There are more than 150 product categories where price limit is set and controlled by
the government. So the competition between firms in pharmaceutical industry is
based mostly on non-price factors like brand preference and customer loyalty,
product quality etc. The nature of rivalry among pharmaceutical industry can be
explained in terms of following factors:
Rivalry in the industry is intense as significant numbers of companies are operating
in this industry. There are around more than 150 companies inthis industry among
which the top 30 companies control more than 90% of the market, which makes the
industry consolidated in nature.
As the government is controlling and setting the price for the product class of around
150 products, the competition is mainly based on other marketing activities instead of
price. Only top 10-15 companies are marketing all these product categories and
rivalry is mainly exist in these products class and among these 10-15 companies.
Competition is not that intense in those product classes for which the government is
not controlling and setting up the prices. Moderately expensive molecules where
demand is coming usually from the affluent and urban classes, competition is getting
high these days as increasing number of companies are coming up to cover these
segments of the market.
Rivalry is strong in the market as the demand for the product is growing slowly. There
are many companies who are offering in the same markets for their products. Rivalry
is also strong because the customers’ cost of switching the brands is low. Doctors are
flexible to prescribe different products for their availability in the market.
Rivalry tends to be vigorous as the exit barriers are very high due to requirement of
huge capital and other investments. Rivalry increases because strong companies of
the other business are acquiring weak firms in the industry and aggressively
launching the pharmaceutical business.
Competitive firms are using price cuts and other competitive weapons to boost unit
volume and to realize the economies of scale which is also causing intensive rivalry.

Potential Entry of new competitors:

Entry barriers in pharmaceutical industry is high for foreign companies as the govt.
rules does not permit foreign companies to enter the market without joint venture
with a Bangladeshi firm owning at least 50% share of the company. Initial capital
requirement, brand preference and customer loyalty, strict government rules and
regulations to match with and qualify for entering this market etc. are also playing as
high entry barriers for the potential competitors. Even though there are high entry
barriers in the industry, threats from potential new entrants in this industry are also
significant because of the industry profitability and the rapid growth of the market.
Following are the factors that can be considered as entry barriers of this industry:

Economies of Scale:
As the scale economies deter entry in this industry and cannot be achieved at the
beginning of operation, potential new entrants have to start on a large scale which is a
costly and perhaps a risky move. Sustainable profitability certainly depends on the
scale of the operation and production of large volume. Potential entrants have to
encounter scale-related barriers in this industry not just in production but in
advertising, marketing and distribution and raw material purchasing as well.

Brand preference and customer loyalty:

As mass media advertising is not allowed in the pharmaceutical industry,
Promotional and advertisement activities are done through physicians, chemists or
retailers. In case of physicians it’s done through direct contact, providing free
samples, arranging seminars, providing necessary information etc. In case of
chemists or retailers it’s done through discounts, commissions etc. Usually the end
user of the products must follow the physician’s prescription, so they don’t have any
choice in brands. So brand preference and loyalty of the consultant class is playing a
vital role in establishing relative market share in this industry. It’s very hard for any
new entrant to build preference and loyalty to these special segments within a short
period of time.

Distribution channel:
The distribution channel in the industry is not that much organized and therefore all
the big companies have to develop their own channel by their own work force, which
is very difficult and time consuming for new entrants.

Capital requirement:
High capital is required to set up manufacturing facility in the pharmaceuticals
industry. As the economies of scale is present in the industry, high investment is
required to start minimum production for keeping the price low and make the
product competitive. Products are also required to fulfill the standard prescribed and
controlled the regulatory authority, so high investment is required to maintain the
standard of the facility. High cost is also required because of the high cost of
machinery and equipment.

International trade restrictions:

International trade restrictions and government regulation played a major role to
impose high barriers for foreign companies in Bangladesh market. Under the existing
related law, foreign companies can only export or sell medicine in the local market
without affiliation with a local company, but for manufacturing it must go for
fulfilling the local law. This has increased the entry barriers for foreign companies but
reduced the same for local companies.
Threat from substitute products:
Three factors play vital role in strengthening the competitive pressure from substitute
products which are whether attractively priced substitute products are available, how
satisfactory the substitute products are in terms of quality, performance and other
relevant attributes, and the ease with which buyers can switch to substitutes.
Although there is no direct substitute for pharmaceuticals products, there are some
cases where limited substitutes are available. The substitute for general antibiotic is
Ayurvedic and Homeopathic and Herbal medicine. In Bangladesh the rural people
who constitute large share of population highly depend on Ayurvedic and
Homeopathic medicine. In urban areas the trend is more toward medicines with
herbal ingredients rather than chemical. So, in rural areas affluent people pay good
money for Ayurvedic and Homeopathic medicine. They are also very cheap, as they
are not scientifically produced. The rural people being ignorant and uneducated are
unaware about the consequences of taking these medicines. They buy them as they
offer cheaper price. Sometimes fake village doctors use religious believes as a
backdrop for selling false medicine and reject the medicines produced by
pharmaceutical companies. As long as the people of our country don’t educate
themselves these false medicine will be playing significant
role as substitute products.

Bargaining power of suppliers:

Bargaining power of suppliers in this industry is moderately low. Most of the
manufacturers in this industry import raw materials directly from abroad which
constitute low dependency on the raw materials suppliers. Also the number of
suppliers is very high in the industry and the purchase volume is big, which are
playing positive role for the buyers to bargain over suppliers. Therefore, the
dependency on suppliers and the switching cost to other suppliers are relatively low
in this industry.

Bargaining power of buyers:

As the end-consumers are not the decision maker here, the buyer characteristics in
pharmaceutical industry are somewhat different from other consumer products. The
decision makers are mainly physicians and chemist or retailers. There are around
120,000 physicians around the country to whom the competitors visit regularly to
promote their products. Almost all promotional expenditures of the firms, a very big
portion of any firm’s yearly sales revenue, is utilized to convince these segments. Also
as most of the products in this industry are nearly identical and there are significant
numbers of brands existing in this market, the bargaining power of buyers is very
high. The unique power of physicians to make any band establishment and in some
case, unethical practices of sharing mutual benefits among physicians and firms have
increased this bargaining power even higher.

SWOT Analysis
 SWOT Analysis of ACME Pharma
Strengths
.1Big brand image and strong market
position
.2High level of marketing activities
3. Large pool of qualified technical
personnel
4. Competitive price in local and foreign
market
5. Wide range of product offering
6. Products are perceived as quality
product in the market
Opportunities
1. Large potential for export market
expansion
2. Liberal Govt. policy for the foreign
investors for joint venture projects
3. Domestic market is gradually
increasing with the hike in GDP
4. Scope of new product development in
herbal and animal health care segment
SWAN Analysis of ACME Pharma
Weaknesses
1.Cost of treating environmental
hazards
2. Dependency on imported raw
materials.
3. Inadequate knowledge on
international business and trade
related affairs
4. Absence of updated testing and
clinical facilities.
5. Accused of Pollution
Threats
1.Government regulations
2. Negative impact on export due to
exchange rate variation
3.High labor costs
4. Cheaper medicine from China and
India.
5. The fluctuation in raw imported
material price
 Strengths
.1Big brand image and strong market
position
.2High level of marketing activities
3. Large pool of qualified technical
personnel
4. Competitive price in local and foreign
market
5. Wide range of product offering
6. Products are perceived as quality
product in the market
Achievements
 One of the leading and diversified global
conglomerates in Bangladesh
 Employing over 3000+ employees
 Annual turnover of US $60 million
 Business Expansion in FMCG,
Information Technology Services,
Aviation Services, Printing & Packaging
Services, Trading Services, C & F
Services, Apparels and more.
 An ISO 9001:2008 certified company
TWOS Analysis
Weaknesses
1.Cost of treating environmental hazards
2. Dependency on imported raw materials.
3. Inadequate knowledge on international
business and trade related affairs
4. Absence of updated testing and clinical
facilities
Next Step
 ACME Pharma have a plan to continue
excellence and growth in the relevant
business activities.
 Currently exporting successfully to 11
countries World-Wide and plan for
developing new market
 Developing Health Care awareness Serving
 Continue manufacturing quality products &
services
 TWOS analysis of ACME Pharma
Details Score
External Environment
Opportunities Threats EFE Score-
1. Big brand image and 1.Government regulations
strong market position 2. Negative impact on
2.75
.2High level of marketing export due to exchange rate
activities variation
3. Large pool of qualified 3.High labor costs
technical personnel 4. Cheaper medicine from
4. Competitive price in local China and India.
and foreign market 5. The fluctuation in raw
imported material price
5. Wide range of product
offering
6. Products are perceived as
quality product in the
market
Internal Environment
Strengths Weaknesses CPMScore-
1. Large potential for export 1.Cost of treating
market expansion
3.15
environmental hazards
2. Liberal Govt. policy for 2. Dependency on imported
the foreign investors for raw materials.
joint venture projects 3. Inadequate knowledge
3. Domestic market is on international business
gradually increasing with and trade related affairs
the hike in GDP 4. Absence of updated
4. Scope of new product testing and clinical facilities
development in herbal and
animal health care segment
Value chain Analysis:

Ensuring that patients receive the correct medicine, at the appropriate time and from a
convenient location, ACME Pharma is involved in a complex value chain involving three
major components:

1. Manufacturing of the medicine: In order in produce a medicine, a number of

steps are involved, from the initial research and development phase, to gaining
regulatory approval which allows a medicine to be sold in a market to the final
commercialization phase. The specific steps and requirements will differ between types
of medicine, manufacturers and countries.

2. Distribution to the dispensing point: This step includes the transportation and
handling of the medicine from the manufacturer to the end user, whether this is a retail
pharmacy (retailer), hospital or dispensing doctor. The complexity of this journey will
differ depending on manufacturer location, the need for importation of the medicine,
the nature of special handling requirements, and the geographic location of the end user
which will vary between large urban centers and remote rural villages.

3. Dispensing to the end user: Providing the correct medicine dosage and form, to
the right patient, in a convenient and timely manner is the final step in the value chain.
This step can also involve a number of additional activities, including checking for
potential interactions, providing advice, and processing reimbursement claims, each of
which is intended to ensure the patient receives the full benefit and value from the
medicines they receive.
 Figure: Value Chain of ACME Pharmaceutical

Scope:
 Provides historical production or capacity data on ACME Pharma’s operation.
 Analyses and forecasts output for major oil and gas assets to 2020.
 Critical analysis of ACME Pharma’s strengths, weaknesses opportunities and
threats and positioning on the value chain.
 Provides summary analysis of key revenue lines and strategy.
 Details on ACME Pharma’s history, key executives, business description,
locations and subsidiaries as well as a list of products and services and the latest
available company statement.
 Product and brand updates, strategy changes, financial events.
 Latest mergers and acquisitions, partnerships or financings of ACME Pharma
including debt, equity or venture finance.
Reasons to buy:
 Research your competitor’s business structure, strategy and prospects.
 Assess your competitor’s major energy assets and their historic and forecast
performance.
 Identify and assess potential corporate and asset investment opportunities
 Support sales activities by understanding your customers businesses better.
 Qualify prospective partners and suppliers.
 Obtain up to date company information.

SMARTER MODEL
ACME Pharma short-term objective is sustainable development throughout the
organization.
 ACME Pharma aim is to maintain the Sustainable
Development. Key performance metrics are updated every
S-SPECIFIC year.
 For ACME Pharma, Sustainable Development is about
conducting business to promote economic growth, a healthy
environment and vibrant communities, now and into the
future.

 ACME Pharma Ltd is the largest pharmaceutical company in

M- MEASURABLE Bangladesh and it has been continuously in the 2nd position
among all national and multinational companies.
 The sales turnover of The ACME laboratories LTD was more
than US$ 60 million in the year 2014.

 It is their mission to protect civilization, and they will

achieve this with an entrepreneurial spirit and unmatched
A-ACIEVABLE passion for innovation.
  Each of ACME Pharma’ businesses is responsible for
integrating sustainability issues into day-to-day operations,
project development and decision making. They are held
R- REALISTIC accountable through an annual goal-setting process and
report progress to the appropriate committees of the board
of directors. They try to figure out the points to do the things
better for the people, stakeholders, company and the planet.

 ACME Pharma is one of the successful industries. They have

T- TIME talent workforce those are responsible to do the work
effectively and efficiently in timely. Good time management
is their one of the key success factor.

 ACME Pharma is assessing and inventing technologies for

E- ENCOMPASSING essential drugs, and is leveraging expertise, intellectual
property and physical assets in pursuit of economically
viable business opportunities.

 A career with ACME Pharma is a rewarding one. They value

their people and ensure that the rewards and benefits are
R- REVIEWED comprehensive, competitive in the markets where they
operate and designed to recognize each individual’s
contribution.
 GREAT MODEL:
 increase sales growth
 increase productivity

G 
increase profit margin
improve company image & customer satisfaction and
Goals:  ensure continual improvement

 ISO 9001:2008 standard

R 

WHO cGMP standard and
Best practices that are proven effective

Results:  Achieve average 25% growth rate compared to the 13%

registered by pharmaceutical sectors.

 The main objective of the company is to

achieve the maximum market share along the
E whole country within very short time by
utilizing good reputations and providing better
Expectations: quality products.

 ACME’s wanted to ensure Health, Vigor and

Happiness for all by manufacturing ethical
medicines of the highest quality at affordable
prices and expanding in the local and global
market.

Customer Focus : ACME anticipate their customer’s needs and

make it easy for them to do business with us.
A Team spirit: ACME believes in teamwork.

Desire to win: ACME believes “Everything is possible.” That gives

us an edge over our rivals.

Accountabilities: Pro-activity : Anticipate future changes in the industry and we

take proactive moves to seize the future opportunities and take
measures to resolve possible problems.
  Growth from product and geography should contribute to
margin growth over time.
T  Talented workforce those are responsible to do the work
Timing: effectively and efficiently in timely.
 Good time management is their one of the key success
factor.

VISA Model
 ACME Pharma’s holistic approach is to ensure Health, Vigour
and Happiness for all by manufacturing ethical medicines of
the highest quality at affordable prices and expanding in the
local and global market. They view themselves as partners with
Vi-vision the doctors, healthcare professional, all other customers, our
employees and harmonize with environmental issue.
 The main objective of the company is to achieve the maximum
market share along the whole country within very short time by
utilizing good reputations and providing better quality
products.
 Key objectives:

 ACME wants to discover, develop and successfully market

innovative products to cure diseases, to ease suffering and to
enhance the quality of life.
 It wants to be recognized for having a positive impact on
people’s lives with our products, meeting needs and even
surpassing external expectations.
 It strives to create sustainable earning growth. Ranking in the
top quartile of the industry and securing long-term business
success.
S-Strategies
 It wants to build a reputation for an exacting workplace in
which people can realize their professional ambitions.
 ACME strives for a motivating environment where the
creativity and effectiveness are encouraged and where cutting-
edge technologies are applied.
  Customer Focus: They always focus on their Customers. They
listen to and connect with their customers. They anticipate their
needs and make it easy for them to do business with us. They keep
promises. They offer them value and quality services to enrich
lives and enhance business success. They treat customers with
dignity and respect.
 Team spirit: They believe in teamwork. They know that by working
together as a team with common goals they can achieve greatness.
They recognize, respect and value diversity in a team so that they
can develop & maintain a culture of sharing, accepting and
rewarding better ideas. Teamwork is the secret of ACME's success.
A-Action Plan:
 Desire to win: They know how to make things happen and they
know how to win in the battlefield called the market place. They
believe “Everything is possible.” That gives them an edge over
their rivals.
 Pro-activity: They anticipate future changes in the industry and
they take proactive moves to seize the future opportunities and
take measures to resolve possible problems. They adapt quickly
with the changes.
 Integrity: ACME’s stakeholders’ confidence on them drives them
to become more responsible about commitments. They value all
their stakeholders, customers, employees, the community we live
in and the society at large. They strive to deliver their best so that
they can be preeminent in the industry. They take responsibilities
for all their actions.
 Personal Excellence: They achieve leadership and superior
performance through the pursuit of personal excellence. They are
committed to doing and being the best. They seek continuous
improvement and take pride in what they do. They do things to the
highest possible standards. They acknowledge potential of the
individual and create opportunities for all to grow and excel.
 PURE OBEJECTIVE
 ACME is one of the leading pharmaceuticals company in
Bangladesh.It is one of the top mostpharmaceuticals
P-Positive:
companies that have large contribution in the society and
controls.
 ACME has a clear vision to become a leading research based
form manufacturing with global presence within a short
period of time.

Performance: The ACME Laboratories Ltd. continuously seeks

to expand its production facilities, add employees and increase its
sales and marketing efforts.
U- Style: Innovation and usage of technology in almost all of the

Understood: operations.
 According to the latest statistics, out of about
300 Pharmaceutical companies in the country,
The ACME Laboratories Ltd. is one of the top
R-Recorded: four.

 Achieve average 25% growth rate compared to

the 13% registered by pharmaceutical sectors.
Culture: Diverse & engaging as well as it values safety,

 ACME’s approach is to ensure Health, Vigor and

Happiness for all by manufacturing ethical
E-Ethical: medicines of the highest quality at affordable
prices and expanding in the local and global
market.
 ACME’s view ourselves as partners with the
doctors, healthcare professional, all other
customers, our employees and harmonize with
collaboration and transparency.
environmental issue.
 THE BCG MATRIX

BCG STARS ( ) BCG QUESTION MARKES (?)

(high growth, high market (high growth, low market

share) share)

High
Business Growth Rate (Market Growth)

BCG CASH COWS ($) BCG DOGS

(low growth, high market (low growth, low market
share) share)

Low
ACME

High Low
Relative Position (Market Share)
Interpretation

Domestically, Bangladeshi firms generate 82% of the market in pharmaceuticals; locally

based MNCs account for 13%, and the final 5% is imported. Although 235
pharmaceutical companies are registered in Bangladesh, only about 85 are actively
producing drugs. The top 30 to 40 companies dominate almost the entire market; the
top 10 hold 70% of domestic market share; and the top two, Beximco and Square,
capture over 25% of the market. Acme has 3% market share in the pharmaceutical
industry. The industry structure is relatively concentrated.

Market growth

CUSTOMER’S CHOICE OF BRAND NAME Brand Name Respondent (in %)

Square 38
Beximco 24
Incepta 16
Glaxo SmithKline 8
Acme 6
SK-F 4
Others 4

Market analysis including market segmentation

The Bangladesh pharmaceutical marketplace is predominantly a branded generic
marketplace. Pharmaceutical firms in Bangladesh can either sell to the private sector
pharmacies, to the government and its public health care facilities, or to international
organizations operating in Bangladesh (e.g. UNICEF).

Bangladesh pharmaceutical industry is mainly dominated by domestic manufacturers.

Of the total pharmaceutical market of Bangladesh, the local companies are enjoying a
market share reaching around 97%, while the MNCs are having a poor market share.
Out of the top ten pharmaceutical companies in Bangladesh, all are local pharmaceutical
companies. The top two domestic manufacturers, namely Square and Incepta Pharma
are having a combined market share of more than 30% of the total pharmaceutical
market of the country.
Sales of Square Pharmaceuticals, the market leader, were Tk 1,270 crore in
2010,Beximco grew faster than other companies at a staggering 33 percent in 2010 with
Tk 523 crore sales. Incepta's sales and growth rate were Tk 665 crore and 31 percent
respectively, followed by Acme's Tk 600 crore and 17 percent. Eskayef logged Tk 426
crore in sales and the growth rate was 27 percent, the third highest pace in the 2010.
Zenith Pharmaceuticals, established in 1952, Zenith Pharmaceuticals Ltd is one of the
sturdiest growing Pharmaceutical Company committed to produce medicine strictly
under GMP compliance and extended its services to all the valued Customers. The
company complies with GMP at its plant, where validation and documentation ensures
the position in accordance to international standard.
Top Ten Pharmaceuticals and market share

Market segmentation of ACME

Acme operates in a single industry segment, it has its own manufacturing facilities, the
principal activities of the company are formulation, manufacturing and sales drugs in
home and aboard, the overseas offices and associates of ACME are Srilanka,Myanmar
and the exports outlets are Bhutan, Hong Kong, Iraq, Kenya, Nepal, Pakistan,
Singapore, Taiwan, Thailand, Vietnam, Philippines, East Timor, Belize, Ethiopia Etc.
 EFE matrix of Acme Pharmaceutical

Key External Weight Rating Weighted Score

Factors
Opportunities

1. 1 Large potential for 0.20 3 0.60

export market 0.15
0.15 1
expansion 0.10
0.05 2
2. 2. Liberal Govt. policy
for the foreign. 0.40
0.10 4
3. 3. Domestic market is
gradually increasing
with the hike in GDP

4. 4.. Scope of new product

development in herbal
and animal health care
segment

Threats

1. 1. Government 0.05 2 0.15

regulations 0.15 3 0.45
2. Cheaper medicine
0.10 1 0.10
from China and India.
4
3. High labor costs. 0.20 0.80

4. The fluctuation in raw

imported material price

4=the response is
superior
3=the response is
above average Rating
2=the response is
average
1=the response is poor
Total 1.00 2.75

CPM Analysis of Pharmaceutical Industries

Acme Square ACI

Critical Sucess Weight Rating Score Rating Score Rating Score

Factors

Advertising 0.15 4 0.60 4 0.60 4 0.60

Quality of 0.20 3 0.60 4 0.80 3 0.60

Service
Price 0.05 2 0.10 3 0.15 4 0.20

Competitiveness
Management 0.15 3 0.45 3 0.45 2 0.30

Financial 0.10 4 0.40 4 0.40 3 0.30

Position
Global 0.05 2 0.10 3 0.15 4 0.20
Expansion
Customer 0.20 3 0.60 3 0.60 3 0.60
Loyalty
Market Share 0.10 3 0.30 3 0.30 2 0.20
Total 1.00 3.15 3.45 3.00

4=major strength; 3=Minor Strength;

2 Minor Weakness; 1=Major Weakness

Financial analysis of Acme Pharmaceutical

Particulars (millions Tk.) 2009 2010 2011

Net income 3,192 2,033 1,751
Total assets 29,931 42,375 98,098
ROA 5.44% 5.38% 3.50%

ROA is decreasing, year by year indicating inefficient use of assets.

Particulars (millions Tk.) 2009 2010 2011

EBIT 450 607 910
Total assets 29,931 42,375 98,098
ROI 1.50% 1.43% 1.00%

ROI is decreasing, year by year indicating poor efficiency in the use of

investments.

Particulars (millions Tk.) 2009 2010 2011

Net income 3,192 2,033 1,751
Equity 596 1,209 5,832
ROE 27.31% 18.83% 5.90%

ROE is decreasing, year by year indicating declining profitability.

Particulars (millions Tk.) 2009 2010 2011

Net income 3,192 2,033 1,751
Dividends P/S 40.00 45.00 34.00
EPS 7.98 4.51 5.15

EPS is decreasing year by year indicating declining profitability.

Competitor Analysis

Motivating high performance in pharmaceutical sales teams is a growing issue in the

pharmaceutical industry. There are many Pharmaceuticals in our country. Acme
Pharmaceuticals is one of them. The challenges facing the pharmaceutical industry in
motivating sales teams are compounded by a variety of factors that many other
industries do not face including: government regulation of sales practices, non-direct
tracking of sales results, and the impact of managed care on sales performance.

The companies deal in both up upstream and downstream operations. Upstream

operations involve exploration and production while downstream operations include
refining and marketing About 80% of the drugs sold in Bangladesh are generics and
20% 5 registered brands which have 8,300 different forms of dosages and
strengths. The top 30 to 40 companies dominate almost the entire market; the top 10
hold 70% of domestic market share; and the top three, Beximco Square, acme
capture over 25% of the market.

ACME pharmaceutical products on the market are of world-class Standards, others are
less so. Medical professionals and pharmacists interviewed voiced strong opinions on
the quality levels of different brands. Although further comprehensive and systematic
analysis is required to assess Acme pharmaceutical quality, some anecdotal reports exist
of lower quality drugs. Bangladesh's drug distribution marketplace is composed
of small independent pharmacies. This structure combined with an under-
regulated industry, few firms manufacturing pharmaceuticals, and companies
competing to sell branded generics based on brand names provides ample
opportunity for the sale of low-quality drugs at higher 11 significantly in
Bangladesh. Acme Pharmaceuticals has 1,100 representatives and
Acme Pharmaceuticals has 950 representatives visiting pharmacies. None of the
pharmacies visited restock any medicine that does not sell well. The small
pharmacies report only keeping a medicine for a maximum of six months. As its first
move towards internationalization, Bangladesh entered a few overseas markets
exporting a wide range of pharmaceutical products covering all major therapeutic
classes and dosage forms including some developed markets. High-tech specialized
products like inhalers, suppositories, nasal sprays, indictable and infusions are also
being exported.

The following are the export manufacturers: Square, Novartis, Opsonin, Acme, Beximco,
Aristropharma, Eskayef, ACI, Renata, Orion, Jayson and Hudson. Overseas retail
buyers apart, these companies are also supplying pharmaceutical products to some
world-renowned hospitals and institutions like Raffles Hospital of Singapore, Jinnah
Hospital of Pakistan, MEDs of Kenya, SPC of Sri Lanka and KK Women & Children
Hospital of Singapore according to BAPI. Another diversification strategy is to focus on
a comparatively large number of niche market drugs rather than blockbusters. Whether
by accident or design a number of European companies appear to have followed this
strategy. While their total sales of pharmaceuticals place them in the first rank of
pharma companies they have perhaps only one or two drugs of blockbuster status.
Selling a broad range of drugs clearly lessens dependence on the discovery of new
blockbusters, but development and marketing costs need to be watched for the smaller
markets to be economic.

The price of products under the controlled category is determined by the Government.
At present the list of essential drugs contains around 209 items, which are in controlled
category. While the manufacturing companies are allowed to fix prices of their products
that are under decontrolled category. According to the Government regulation, the
pharmacies/chemists are entitled to get 16% retail margins on top of the trade prices of
products. Most of the leading pharmaceutical manufacturers have their own distribution
network and ensure supply of products up to retail level. Companies that do not have
their own distribution networks have to distribute their products through
distributors/wholesalers. In that case they usually fix the distributors margin as
mutually agreed.
Break Even Analysis

The break-even point is the sales level at which revenue equals total costs. This means
that at the break-even level of sales, there is neither a profit nor a loss.

To illustrate markup pricing we consider the following cost and expected sales of unit
produced by ACME Laboratories Ltd.
The figure shows break-even chart of ACME Laboratories Ltd. fixed costs are Tk.
1000,000 regardless of sales volume. Variable costs are added to fixed cost to form total
costs, which rise with volume. The total revenue curve starts at zero and rises with each
unit sold. The slope of the total revenue curve reflects the price of Tk. 14 per unit.The
total revenue and total cost curves cross at 357,143 units. This break-even volume
means at Tk. 14 ACME must sell at least 208,333 units to break-even.
 If ACME wants to make a target profit, it must sell more than 208,333 at Tk. 14 each. If
ACME invested Tk. 40,00,000 and wants to set price to earn a 20 percent return or Tk.
8,00,000 then they must sell at least 3,42,857 units at Tk. 14 each.

QSPM of Acme Pharmaceutical

Key Factors Alternative 1 Alternative 2

(Exploration in (Exploration in Algeria,

Afganistan,Srilanka South Libya North Africa)
Asia)

Weight Attractiveness Total Weight Attractiveness Total

Score Attractiveness Score Attractiveness

Score Score

Strengths

1. 1. Big brand image and 0.20 3 0.60 0.15 3 0.45

strong market position

2. 2. Wide range of 0.05 4 0.20 0.10 4 0.40

product offering
0.10 2 0.20 0.05 1 0.05
3. Competitive price in

local and foreign

market 0.15 1 0.15 0.20 2 0.40
4. High level of
marketing activities

Weaknesses

1. 1. Dependency on 0.20 2 0.40 0.15 2 0.30

imported raw materials 0.15 2 0.30 0.20 1 0.20
2. 2. Absence of updated
 testing and clinical 0.05 4 0.20 0.10 4 0.40
facilities 0.10 1 0.10 0.05 2 0.10
3. 3. Accused of Pollution

4. . Increasing demand
for gas and products

Sum Weights 100% 100%

Opportunities

1. 1 Large potential for 0.15 3 0.45 0.20 2 0.40

export market 0.10 4 0.40 0.10 4 0.40
expansion

2. 2. Liberal Govt. policy

0.20 3 0.60 0.15 3 0.45
for the foreign.
0.05 2 0.10 0.05 1 0.05
3. 3. Domestic market is
gradually increasing
with the hike in GDP

4. 4.. Scope of new product

development in herbal
and animal health care
segment

Threats

1. 1. Government 0.20 3 0.60 0.15 3 0.45

regulations 0.15 2 0.45 0.20 3 0.60
2. Cheaper medicine
0.10 4 0.30 0.05 4 0.20
from China and India.
3. High labor costs. 0.05 1 0.05 0.10 1 0.10
4. The fluctuation in raw
imported material
price

Sum Weights 100% 100%

Sum Total 5.10 > 4.95

AttractivenessScore

AttractivenessScore

1=Not acceptable

2=Possibly acceptable

3=Probably acceptable

4= Most acceptable

0=Not relevant

We choose Alternative-1.Because the Total Attractive score of alternative-1 is 5.10 and

Total Attractive score of alternative-2 is 4.95.So the Total Attractive score of alternative-
1 is greater than the Total Attractive score of alternative-2. So we choose Alternative-1.

KSF analysis (Key success factors)

Following are the key success factors of the ACME pharmaceutical:

Technology Related KSFs:

 Technological superiority in manufacturing process.
 Research expertise in introducing new products
 Advance technology in marketing, distribution and production system
 Capability to utilize the internet technology in product research, marketing and
distribution
 Advanced systems and telecommunications infrastructure to support all kinds of
manufacturing and distribution process.
Manufacturing related KSF’s:
 Low production cost by achieving scale economies, learning and experience curve
effects.
 Maximum utilization of fixed assets because of the nature of high fixed-cost industry.
 Availability of skilled labor.
 Low cost product design and engineering

Distribution related KSF’s:

 Broad network of wholesales and distributors.
 Short delivery time.
 Low distribution costs.
 Having company owned retail outlets.

Marketing Related KSF’s:

 Efficiency of marketing department.
 Superior customer service.
 Wide product line.
 Attractive styling of packaging

Skills-related KSF’s:
 Superior workforce in manufacturing and quality control department
 Quality control know how

Other KSFs
 Convenient locations and overall low cost
 Favorable reputation and image with buyers
 Pleasant and courtesies employees
 Providing safe and healthy workplace
Strategy Evaluation

In order to maintain ACME Laboratories Ltd.’s long term growth and performance,
in a very competitive market

1) It is suggested that ACME Laboratories Ltd should apply a best-cost provider

strategy where it will be able to offer a better quality with the same market
price, or a better price with the same quality. As one of the ACME Laboratories
Ltd.’s main strategic objective is to maintain its product quality high and also
keep the existing market share, this best cost provider strategy would definitely
help ACME Laboratories Ltd to maintain its high quality as well as marinating
its status of industry leader.

2) Vertical integration strategy: reducing dependency on inputs and enhancing

distribution network. One of ACME Laboratories Ltd.’s major difficulties are to
effectively use the inbound and outbound logistic sectors of its value chain
activities. A huge cost is incurred while marinating these value chain activities.
Due to global and local macro environmental instability (strike, demand-supply
movement, exchange rate, natural calamities), it has to pay more unforeseen
direct and indirect costs. This is certainly a major constraint to keep the market
dominancy. ACME Laboratories Ltd has to apply progressive strategy to gain
strong control over its inputs. ACME Laboratories Ltd must put more resources
to improve its production of raw materials to reduce absolute dependency on
suppliers. This step will also reduce its duty expenditure; therefore direct
contribution to its profitability. ACME Laboratories Ltd also has to find ways to
enhance its distribution network, both local and foreign. Strong distribution
network is a vital competitive advantage in pharmaceutical business, which
must be realized to maintain the leadership position. Instead of depending on
outside distributors, ACME Laboratories Ltd should put more emphasis on
running direct sales centers or expanding forward integration by acquiring
major distributor of Pharmaceuticals products. Due to only relatively weaker
distribution channel, ACME Laboratories Ltd is losing its potential sales
prospects. Due to weaker presence of traditional readily available distribution
 channel, higher involvement of self-operated company owned distribution
channel represents a unique nature of the industry.

3) Reduction of overhead cost by increasing the production capacity. One way to

reduce or keep cost of operation low is to increase the production capacity. It is
suggested that ACME Laboratories Ltd must go for utilizing its full capacity to
reduce its overhead cost. The full utilization of the capacity will give significant
benefit for the company in terms of reducing overall cost and to expand its sales
in more geographical areas. The fixed assets would be utilized properly and
efficient employees will help to reduce the total cost for the company. The
company can also subcontract its distribution channels for delivering products.
The company may also supply products to other companies to reduce its
overhead costs further.

4) Cooperative strategy: strategic alliances with foreign companies. In this

globalization era and in a competitive marketplace companies in all types of
industries and in all parts of the world have elected to form strategic alliances
and partnerships to complement their own strategic initiatives and strengthen
their competitiveness in domestic and international markets. ACME
Laboratories Ltd has to think of a better cooperative strategy. ACME
Laboratories Ltd has already started entering foreign market and to explore
more foreign country and to cover more geographic region, ACME Laboratories
Ltd must find out suitable partner oversees to enter new market. In domestic
market, it has already matured. Lot of new competitors is operating with
different competencies with different strategies. It is also important for ACME
Laboratories Ltd to find ways in local market to explore this type of strategic
alliances with foreign company in terms of R&D, product improvement, new
production facilities or even improving the marketing activities.

5) Expand geographical coverage and maintain international standard. As we have

found ACME Laboratories Ltd has potential to increase its production capacity
while maintain the product standard, ACME must aggressively increase its
geographical coverage with all the products across the countries. ACME
Laboratories Ltd has already achieved much progress in exporting its products
 in neighboring countries and gains much confidence in entering new markets,
the company should give much attention to explore the new areas and maintain
the international standards of the products. The higher geographical coverage
will lead to more demand for the products as well as reduce the overhead costs
of the company Expand geographical coverage and maintain international
standard. As we have found ACME Laboratories Ltd has potential to increase its
production capacity while maintain the product standard, ACME must
aggressively increase its geographical coverage with all the products across the
countries. ACME Laboratories Ltd has already achieved much progress in
exporting its products in neighboring countries and gains much confidence in
entering new markets, the company should give much attention to explore the
new areas and maintain the international standards of the products. The higher
geographical coverage will lead to more demand for the products as well as
reduce the overhead costs of the company

6) Diversify business:Another alternative strategy ACME Laboratories Ltd should

seriously pursue is to diversify in profitable related business. As we know ACME
Group of Industries has gained tremendous successes by diversifying its
business in all profitable related and unrelated business, ACME Laboratories
Ltd Pharmaceuticals can explore this experience and diversify its own business
in more profitable related business.
Contingency Plan

If the above recommended strategies fail to achieve the objectives and incur financial
losses due to unforeseeable events, ACME should give up those strategies and adopt
the following

Focused Differentiation-
In a focused differentiation strategy ACME will concentrate on producing the
best quality product in the industry and sell it to a group of sophisticated and
conscious customers.

Technology and Innovation-

They have invested in technology to develop efficient, economical and
environmentally sound ways to find, produce and market medicine.

Health, Safety and Environment-

Increase emphasis on process safety, risk management, emergency preparedness
and environmental performance while retaining intense focus on occupational
safety.

Sustainable Development-
Update their strategies and action plans for these important issues and focused
on goals such as reducing waste and emissions.
Recommendation

To achieve the objectives of keeping the status of market leader and the high growth
trend by further increasing the market share and to expand the export to more
geographic regions by entering to more foreign countries, a complete package of a
number of alternative strategies developed in the previous section has been
recommended as follows:
Strategic alliance and cooperative partnership: Helping to get world recognition
To make the way smooth while entering more world market, ACME Laboratories Ltd
should take initiative for strategic alliance with big foreign reputed companies. This is
more easier for ACME Laboratories Ltd for developing cooperative partnership, as it
has already some connections and associations with some major foreign companies.
This strategic move will enable ACME Laboratories Ltd to understand cross-cultural
boundaries, which is a vital competitive advantage for international business.
On the other hand, ACME Laboratories Ltd can utilize the strategy of strategic
alliance by getting direct entry in valuable skills, technology and management quality
of their foreign partners. Implementing this strategy effectively can significantly
change ACME Laboratories Ltd to become the one of the renowned players in the
global pharmaceuticals.
To provide more value for the money, ACME Laboratories Ltd has two options –
reduce the price maintaining the same quality or maintain the price increasing the
quality. As ACME Laboratories Ltd must maintain the current quality, it has to
reduce the price slightly to make its products more competitive in the market. Even if
this step reduces the profitability of the firm, ACME Laboratories Ltd has to consider
it and implement this strategy for the short-term.
To maintain its leadership position stronger and long lasting, ACME Laboratories Ltd
has to be prepared for strengthen the position in local market and aggressively
expand geographic coverage by increasing the export. In order to do that ACME has
to reduce its dependency over raw materials and gain control by finding ways to
produce some category of raw materials locally. It should also enhance the current
distribution network, both local and foreign to enlarge the market coverage. ACME
must take these initiatives. Moreover, a backward integration will increase its ability
to reduce the cost and increase their control over price, which is necessary for ACME
to maintain its leadership position in a business.
Conclusions

If the above recommended strategies fail to achieve desired objectives and incur
financial losses due to unforeseeable events ACME should dump the above strategies
and adopt a focused differentiation strategy. In a focused differentiation strategy
ACME will concentrate in producing the best quality product of the industry and sell
it to a group of sophisticated and conscious customers. This will enable ACME to
charge a premium price in the market and also export to the quality conscious
western countries to a certain extent.
And ACME should also reduce its operating cost by cutting down the distribution
network and withdrawing the backward integration activities. This strategy will
reduce ACME’s overall sales revenue, but it also will increase the profit margin.
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http://www.acme pharma.com/investor-
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http://en.wikipedia.org/wiki/acmepharma

http://www.mba-tutorials.com/strategy/mission-vision/1702-acmepharma-vision-
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http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=
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http://www.acmepharma.com/sustainable-
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http://www.researchandmarkets.com/reports/612871/acmepharma_analysis_ _