The pharmaceutical business is vital in Bangladesh. It is the only industry that has significant production capability for medicines. Bangladesh has about 250 pharma companies. Among them, some are big and complex. Some businesses are modest and traditional. Precisely a handful corporations control the whole. Their rivalry in the pharmaceutical industry is fierce. One of the most essential aspects of every industrial sector is its SWOT (Strengths, Opportunities, Weaknesses, and Threats) study. Square Pharmaceutical is a locally owned and operated business in Bangladesh. It is one of the oldest corporations in Bangladesh, as well as one of the most fundamentally sound corporations in the country. The discussion of SWOT Analysis of Square Pharmaceuticals is stated below:
Strengths
Experienced Executives & Effective Staffs: The company maintains a pool of highly qualified and experienced executives along with the mid-level managers in order to ensure that all of its companies remain operational. And also, Square Pharma employs about 6710 people, the majority of them are highly trained and effective.
Goodwill: SQUARE PHARMACEUTICALS LTD has a very strong presence in the local community and is earning much-appreciated recognition in other parts of the world. This will provide them with a competitive advantage while competing both locally and globally in the future which is undoubtedly one of the strongest aspects of this company internally.
Cross Subsidization: SQUARE is indeed a diversified company that works over a broad range of Strategic Business Units that span a wide variety of toiletries and consumer products. If the profits are kept, they may be used to finance initiatives or manufacturing lines that are not profitable in the long run, if the management believe this is possible in the long term. To add, Square Pharmaceuticals plans to spend Tk 250 crore in order to grow its company in response to increasing pharmaceutical demand.
Developed Infrastructure: The company has an established chemical, research and development, and manufacturing infrastructure, as well as a track record of advanced chemistry capabilities, high-tech production facility design, and regulatory compliance. Additionally, it has an extensive marketing and distribution network. Their presence of a strong domestic market with increasing per capita spending facilitates the attainment of economies of scale in the manufacturing industry.
Weaknesses
Low profitability and profit growth: Even if the price of raw materials is rising, the rate of profit growth is remaining stagnant, resulting in a profit margin that remains low. Unit costs and manufacturing costs are higher when raw materials are purchased from a limited number of different suppliers.
Diversification: Diversification may be detrimental to a single key business unit like SQUARE PHARMACEUTICAL LTD. Human, financial, technological, physical, and informational resources may be allocated without rational and efficient decision making. SQUARE Pharma LTD’s R&D budget may be decreased to fund another key business unit.
Lack of Advanced Technology: Because modern technology is costly and not yet accessible in Bangladesh, it is not used in the company’s production facility. Therefore, it has been reusing outdated technologies to produce medications as a result of this.
Time Consuming: Because they have done well from the start, their decision-making process is slower than other businesses. As a consequence, the decision is made at a higher level which is time consuming.
Opportunities
Patent Rights: Obtaining patents and even receiving royalties for the creation of new medicines is common practice in the pharmaceutical industry; this provides the company like Square Pharma Ltd with a brief monopoly status, which may be advantageous if product development is efficient.
Emerging Markets: Philip Kotler previously said that all Star branded SBUs (Strategic Business Unit) ultimately transform into Cash Cow SBUs; nevertheless, as the world economy progresses, a larger market is accessible to be catered to, resulting in an increase in turnover and profits. To add,
Intensive Government Support: Bangladesh’s pharmaceutical sector is expanding. The government is heavily promoting this industry’s future development. The Bangladeshi government has huge support for pharmaceuticals company. As a consequence, the business may readily raise money from many sources. So, there’s room for growth. Square, a reputable business with a great product, has enormous worldwide potential.
Other Earning Source: International exchange services from a reputable foreign bank may help a company increase its income.
Threats
Competition: Market structures that generate profits encourage new companies to operate with similar or identical products, causing current firms to lose market share. Furthermore, competition is a major concern owing to two factors: local businesses and international firms with greater capital and superior technology.
Increase Price of Raw Materials: The cost of raw materials is rising, which will result in an increase in the cost of manufacturing or production process. The cost of manufacturing or production process is increasing day by day as a result of the increase in the price of raw materials. Because it is a local business, it will have little impact; but, when it comes to expanding internationally, it is a significant obstacle in terms of cost.
Rise of Interest Rate: The bank’s interest rate is rising on a daily basis, as the economy becomes more prosperous and prosperous. As a result, the investors are unwilling to borrow money from the bank.
Focusing on Short Term Plans: The sector is undergoing a worrisome transformation. Certain businesses seem to be more concerned with maximizing short-term sales than with long-term profitability. This change in emphasis is never beneficial to the industry. Prices plummet and marketing spending to fund gimmicks soars, resulting in reduced profit margins per unit sold. Numerous businesses panic at this point and join the bandwagon of unethical selling and marketing methods.
Recommendations
Because medications are intimately linked to life, the pharmaceutical sector must commit to quality. And therefore, Square pharmaceuticals ltd. should maintain product quality according to international standards. Square Pharmaceuticals now leading the pharmaceutical industry in Bangladesh. All of its rivals want to expand their market share. So, this company should focus on increasing market share. The company has grabbed Asia, Africa, and the Middle East but not Europe. So Square Pharma should focus on Europe. Their inventory management system is failing, and they should prioritize this issue.
REFERENCES
- https://www.researchgate.net/publication/270553516_A_Study_on_SWOT_Analysis_of_Pharmaceutical_Industry_The_Bangladesh_Context
- https://swotbangla.wordpress.com/2016/06/22/swot-analysis-of-square-pharmaceuticals-ltd/
- https://dokumen.tips/reader/f/strategic-analysis-on-square-pharma
- https://www.thedailystar.net/business/news/square-pharma-plans-tk-250cr-expansion-1984413
