• Like

Loading…

Flash Player 9 (or above) is needed to view presentations.
We have detected that you do not have it on your computer. To install it, go here.

Pgprak12 group12 mankind pharma

  • 1,295 views
Uploaded on

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
1,295
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
90
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. MANKIND PHARMAThe Growth StrategySubmitted By:Abinash Behera (2012PGPRAK006)Aniket Harsh (2012PGPRAK011)Anoop Kumar S (2012PGPRAK014)
  • 2. MANKIND PHARMAApril 23,20132Table of ContentsThe Indian Pharmaceutical Market ..........................................................................................................3Mankind: Profile and Portfolio.................................................................................................................3Mission and Vision...................................................................................................................................5Competitive Advantage...........................................................................................................................5Customer Management...........................................................................................................................6Growth Story...........................................................................................................................................8INTERNATIONALIZATION .....................................................................................................................9Portfolio Analysis...................................................................................................................................10The way ahead: 5 Forces analysis and Future plans ...............................................................................11Tackling Challenges and moving forward...............................................................................................13Exhibits .................................................................................................................................................14Exhibit 1: Divisions and their products ...............................................................................................14Exhibit 2: The timeline.......................................................................................................................15Exhibit 3: Number of Medical Representatives across industry ..........................................................16Exhibit 4: Prices of Mankind Drugs as compared to Competitors........................................................16Exhibit 5: Financial Overview .............................................................................................................17Exhibit 6: OTC and Personal Care brands of Mankind that have celebrities in advertisements............18References ............................................................................................................................................19
  • 3. MANKIND PHARMAApril 23,20133The Indian Pharmaceutical MarketIndia is one of the fastest-growing pharmaceutical markets in the world, and its market size hasnearly doubled since 2005. It is expected to touch US$ 74 billion in sales from the current US$11 billion in the coming years at an expected growth rate of 13-14% and by 2013 establish itspresence among the world’s leading 5 emergence markets. Currently, Indian pharmaceuticalmarket ranks third in the world in terms of volume and 10thin terms of value. The totaldomestic market capitalization of Pharma Industry is US$ 10.88 billion.Low cost of skilled manpower, increasing sales of generic medicine, greater penetration of ruralmarket and innovation are some of the main factors fueling this growth. Another reason for therapid growth of the Indian pharma industry is the increased level of disposable income whichhas brought about a drastic change in eating habits & lifestyle. Because of such lifestylechanges, there has been a progressive growth in lifestyle related diseases like- Cardiovasculardisorders, diabetes, respiratory tract infections, neuropsychiatry disorders as well infectivediseases etc. According to the Department of Pharmaceuticals, the Indian pharmaceuticalindustry employs about 340,000 people and an estimated 400,000 doctors and 300,000chemists. Based on the pharmaceutical customer base, the Indian Active PharmaceuticalIngredients (API) manufacturing segment can be divided into two sectors – Innovative orbranded and generic or unbranded. Innovative or branded sector companies seek to developnew and innovative APIs. Generic companies mass produce APIs for popular/common drugs forwhich patents have expired. Most pharma companies run a hybrid structure wherein Genericsection is the cash cow, financing research and development for the innovative products.Mankind: Profile and PortfolioMankind was founded by ex-employee of Lupin, Ramesh Juneja and his brother RajeevJuneja with an aim to provide quality medicines at economical prices. It was started with a
  • 4. MANKIND PHARMAApril 23,20134capital of Rs.50 lakh and 25 medical representatives. Both the founders had accumulated richexperience working as MRs for Lupin. Mankind started with medicines and has recentlydiversified to include Veterinary medicines, pet care and FMCG products in its portfolio. Withits innovative marketing strategies, Mankind now ranks as the eight largest drug manufacturerin India, ahead of Lupin pharma with a turnover of 2500 Cr. It has successfully maintained astrong growth rate of 16-18% against the industry average of 13-14% (See Exhibit 5).Mankind group markets its products through the following divisions catering to varioustherapeutic segments (see Exhibit 1):Mankind Pharma- The parent division founded in 1995.Discovery Mankind- founded in 2003 for offering a range of products to treat diabeticmetabolic disorders, antibiotics, GI drugs, anti-fungals etc.Lifestar Pharma- incepted in 2005 for providing comprehensive range of products relating toophthalmic, dermal segment and antibacterials.Special Mankind- launched in the year 2005, marked Mankind’s venture into the OTC segment.This division is pioneer in launching of premium category condoms, toothbrush, sanitarynapkins & sweeteners.Future Mankind- started in 2007 this division caters to the needs of acute and chronicsegments like orthopedic and GIMagnet Labs- Acquired in 2007 to establish presence in the antipsychotic segmentVet Mankind- Established in 2007 to serve the Indian animal husbandry needs. Productsinclude antibacterial, nutritional, reproductive, NSAIDS and digestive categories.Pet Mankind- Catering exclusively to basic care, health and hygiene and nutritional needs ofpets.Offering analysis
  • 5. MANKIND PHARMAApril 23,20135• Acute Drugs- for diseases that usually last for a short duration like anti-infectives,painkillers or analgesics.• Chronic Drugs- for diseases that are recurring in nature and include lifestyle diseaseslike anti-diabetics, cardiovascular, cancer etc.• Over the counter (OTC)- are medicines (or medical kits) sold directly to a consumerwithout a prescription from a healthcare professional, as compared to prescriptiondrugs, which may be sold only to consumers possessing a valid prescription. E.g.PregaNews, Unwanted-72• Veterinary Products- Medicines catering to diseases in pet animals. E.g.- Petogas,NewForce pet etc.• FMCG/Personal Care- Personal care products. E.g.- ‘Adiction’ deodorant and ‘Don’tWorry’ sanitary napkins.Mission and VisionMission: To support a healthy & active lifestyle through our broad portfolio of Pharma, OTC &FMCG products.Vision: To be the No.1 Pharma Company of India by 2015.Competitive AdvantageMankind is a cost leader. High economic disparity in India spawns a huge chunk of populationthat is disadvantaged due to its limited purchasing power. This segment is highly price sensitiveand concentrated mainly in the rural and semi urban pockets. This sensitivity to price is also afunction of whether the drug category is acute or chronic. People are highly price sensitivewhen it comes to acute drugs but the trend reverses when it comes to drugs for chronicdiseases. This led Mankind to focus their operations in rural market with acute drugs. Unlike
  • 6. MANKIND PHARMAApril 23,20136their competitor they have followed a bottom up approach. They have started targeting ruralareas first then tier 2 and tier 3 cities in 2002 and later they entered tier 1 cities in 2006. Thetarget segment for Mankind has been the populace living in the rural and semi urban areas thatdoes not have the purchasing power to afford costly medicines manufactured by otherpharmaceuticals (See Exhibit 4).The Juneja brothers themselves started off as Medical Representatives and as such there is adistinctive leaning towards marketing side of the business to drive sales at Mankind. Thecompany has a very aggressive marketing policy employing a very comprehensive customerengagement model. 80% of staff is MR which allows Mankind effectively to employ the Pushstrategy to drive sales (see Exhibit 3). Their MRs are amongst the most highly paid in theindustry. The compensation system has a low fixed component. The variable component is afunction of sales and there are no targets. This means that there is no cap or upper limit to thesalary a MR can earn if he is good at selling.Customer ManagementThe sales of a particular brand of medicine for a region are a function of the number of doctorsprescribing it and availability of that brand in the drug shops of the region. Hence primarycustomers for any pharmaceutical company are- Physicians and retail chemists.Mankind employs the push strategy to drive its sales. The following are the main features of itscustomer engagement strategy:Physicians:• Selection of the doctors through a detailed survey.• Positioning of the medicines depends upon the prescribing habits of the physicians.• Detailing the products to the doctors & providing free drug samples.• Regular follow-ups with the doctors to check on continuity of prescriptions flow &availability.
  • 7. MANKIND PHARMAApril 23,20137• Providing informative literatures relating to current developments in the medicines.• Health check-up camps for the doctors & patients.• Gifts for incentivizing and showing appreciation.Depending upon the volume of prescriptions (prescriptions where in Mankind brands havebeen prescribed), physicians in any given region are categorized as:VIP- (Very Important Physicians) Highest levels of sales are through themIP- (Important Physicians) they generate medium levels of sales.GP- (General Physicians) their contribution towards Mankind sales is low.Every month, company distributes gifts to each of their listed physicians. The gifts planned areas per the volume of business given by the physicians and accordingly, the value of gifts differs.Hence physicians are motivated to move from lower category of physicians to the highercategory. This was most effective in the rural and semi-urban areas as the physicians there hadtraditionally been ignored by the top pharma companies. To touch the untouched customerswas the brilliant tactical move that spurred Mankind’s growth.Retail Chemists:• Giving discount on purchase to the retail chemists. Largest discounts in the industry areprovided by Mankind.• Giving gifts on purchase.• Facility of expiry products reimbursement.• Frequent visits by MRs to ensure availability of medicines and monitor the levels ofsales.Consumer engagement (for OTC and FMCG products)In keeping with their reputation of being aggressive marketers, Mankind ensured highavailability of their OTC products in drug stores through their strong MR network and spent
  • 8. MANKIND PHARMAApril 23,20138millions in advertizing through visual media. Their ads are humorous, catchy and even a feastfor the eyes. Mankind ensures that its OTC products stand out in a crowded market by usingfamous celebrities in the ads (See Exhibit 6).They were the first ones to advertize pregnancy testing kits on television. The advertizingstrategy has worked wonders for Mankind’s OTC division in terms of making it the mostrecognized brand where OTC market is concerned. Their investment in advertizing has directlytranslated to increased sales.This however is not true for their personal care and FMCG products. They were able to leveragetheir existing channels in promoting and distributing the OTC products. But this channel provedinadequate when it came to personal care and FMCG products. The presence of wellestablished brands and large players with extensive channel reach make survival in this marketdifficult and costly. As a result Mankind is suffering losses and might look to divest this portfolioin future.Growth StoryMankind started its growth organically but later on it adopted the inorganic model for fuelingfast paced growth (see Exhibit 2). They are mainly focused on being a high volume player in themarket which can offset their low price strategy.During mid 1990s when they had just started, the entire manufacturing was outsourcedas they did not have the high capital required to set up their own manufacturing plant. Later inthe late 1990s they set up their first manufacturing plant in Paonta Sahib, Himachal Pradesh.Currently they have around 13 manufacturing plant which manufactures around 95% of theirdrugs. In absence of any competitor in low price segment they managed to occupy the marketquickly. Due to the price wars they were operating at very low margins. Sustaining at thatmargin was very difficult for them. So they decided to diversify their business and entered intohigh margin segments like OTC, personal care and Vet-nary market in 2007.In 2007 the domestic OTC market was worth Rs 5500 crore and was growing at 20-25percent. They entered this market through their Special Mankind division. Their mainstay
  • 9. MANKIND PHARMAApril 23,20139brands in this segment are Manforce condoms, Unwanted 72-emergency contraceptives andPrega-news home pregnancy kits. Though high margin was the main motive behind the entryinto the OTC segment, it also resulted in recognition of Mankind as a brand. In the same yearthey also entered the veterinary segment with the launch of the division called Vet Mankind.For both of this new segment they used their existing distribution channel which eased theirentry into the new segment. They also made inroads into the 1000 crore antipsychotic segmentthrough their Future Mankind division. To further increase their market share in this segmentthey also acquired Magnet Labs.The rapid expansion and diversification in 2007 was funded by Gujarat based ChrysCapitalthrough a private placement of $24million. In 2008 for a further infusion of funds into thebusiness, Mankind had planned for an IPO. It was later abandoned because of the 2008recession. In 2010 Mankind acquired Longifene,A former brand of UCB Pharma.INTERNATIONALIZATIONThey have started exporting to third world countries like Vietnam, Philippines, Srilanka andRwanda. The main rationale behind choosing third world countries is their surging economyand demographic similarities with the market in India in terms of low purchasing power of alarge section of the population.
  • 10. MANKIND PHARMAApril 23,201310Portfolio AnalysisWe shall employ the BCG matrix to conduct portfolio analysis for Mankind:-1. Acute Drugs: The market growth rate is low but relative market share is high. Thismakes acute drugs CASH COWS that will generate steady cash flow to finance thegrowth of Mankind.2. OTC and Veterinary Products- High market growth rate combined with high marketshare make OTC and Veterinary Products the STAR. Mankind will reap rich dividend bycontinuing to invest in them.3. Chronic Drugs: are the Question marks. Mankind doesn’t have a substantial marketshare in this segment, but if successful it can emerge a star. So Mankind should look atshifting focus to chronic drugs and continue investing in them.4. FMCG and personal care products: These are the DOGS in the portfolio that Mankindshould look to divest. The presence of large players in this segment and lack of adequatechannels make it a low growth and low market share segment which should be eithermilked for all its worth or divested outright.
  • 11. MANKIND PHARMAApril 23,201311The way ahead: 5 Forces analysis and Future plansCompeting on price is not a sustainable strategy. Therefore, Mankind has over the yearsdiversified into higher-growth, higher-margin over the counter and fast-moving consumerproducts categories. Currently, Mankind pharma is focused on pushing its new products,particularly in segments such as dermatology and cardiology and gain market share to becomethe number one company in the India by 2015. This is being done as part of its move to bolsterits position in the chronic drugs segment and make a subsequent shift from the low cost highvolume segment to the higher margin segments.They are planning to launch 15-16 products in the chronic therapy segment this financial year.Introducing drugs in the chronic segment would not only contribute to the turnover, but alsoboost net profit. In their FMCG venture, new products have been introduced recently. Howeverthe logical course of action would probably be to divest it down the line.
  • 12. MANKIND PHARMAApril 23,201312CIPLA,RANBAXY,GSK,DR.REDDYSETC ARE PLAYING IN THEMAINSTREAM THAT WILL MAKEMANKINDS ENTRY INTO CHRONICDRUGS MORE COMPETITIVE.CURRENT LOW PRICE SEGMENTSDOMINATED BY MANKIND AREALSO BEING TARGETED BY THESEBIG COMPANIES,WHICH WILL ALSOPOSE THREATNEW ENTRANT INTHE LOW PRICESEGMENT WITHAGGRESSIVESTRATEGY COULDWIPE OUTMANKIND,UNLESSMOVE TO OTHERSECTOR ISINITIATEDCONCENTRATINGONTHELOW PRICESEGMENTSTHESEYEARSTHEPOWER OFBUYERS IS HIGH.MOVE TO CHRONICSEGMENT,OTCS,FMCGWILL CUSHION THEEFFECT OF THIS TOAN EXTENTPATENTPROTECTIONANDR&D COULD HELPIN AVOIDINGTHREAT FROMSUBSTITUTES.BUTIT STILL NEEDS TOIMPROVEPRODUCTS ANDPATENTS ANDRESEARCH TOMAINTAIN THEADVANTAGEMANKIND WITHITS HIGH GROWTHLOW PRICE ANDHEFTY PROFITMARGINS, CANCONTROLSUPPLIERS. SOFORCE FROMSUPPLIERSIS LESSPORTERS FIVEFORCES
  • 13. MANKIND PHARMAApril 23,201313Tackling Challenges and moving forwardAs a part of the growth focus Mankind has realized that the transition to selling products in thechronic segment in big cities needs more effective strategy compared to the price-penetrationstrategy in order to acquire a significant market share. Mankind needs to establish a leadershipposition in the cardiac, diabetes and CNS (central nervous system) therapeutic segments beforeit can hope to reach the top of Pharma sector.Mankind is already present in 90 % of the total market product portfolio. Therefore to launchnew drugs it will need to come up with new dosage forms and delivery systems — in much theway its competitors are doing. Current pricing strategy of Mankind leaves it vulnerable toattacks from other emerging low price players in the market. Entry of an ultra low cost playercan wipe out Mankind from the market. Another major concern is that there is a perception inthe metros and tier 1 cities that Mankinds drugs are of poor quality simply because they arecheap. For an aggressive entry in to chronic segment, mankind needs a face change. Tosubstantiate the quality of their products a modern R&D facility needs to be setup or strategicalliances should be made. The initial investment is huge and so is promise of high profitmargins. It will also enhance Mankind’s image as a legitimate and credible competitor in theglobal pharmaceutical arena.
  • 14. MANKIND PHARMAApril 23,201314ExhibitsExhibit 1: Divisions and their productsDivision ProductsDiscoveryMankindDiabetic, metabolic disorders, antibiotics, gastro-intestinal andantifungalLifestarPharma*Ophthalmic, dermal and antibacterial.SpecialMankindPremium category condoms, sanitary napkins, body spray,pregnancy test kit, toothbrush and sweetenersFutureMankindOrthopedic and gastro-intestinalMagnet Labs* Antipsychotic segmentVet Mankind Veterinary products like antibacterial, nutritional, reproductive,NSAIDS and digestive categories.Pet Mankind Exclusively to the Basic Care, Health, Hygiene and Nutritionalneeds of the Pets
  • 15. MANKIND PHARMAApril 23,201315Exhibit 2: The timeline1995•Inceptionof Mankind Pharma2002•Company establishedits operations all over India•Launched new division Discovery mankind for the segments-Diabetic,, Metabolic Disorders, 
Antibiotics,Gastro-­­intestinal,Anti-­­fungals.2005•Celebrated“Decade of trust” with medical fraternity•Launched LifestarPharmafor the segments -­­ Ophthalmic,Dermal, Gynae ,Antibacterials•Won the Indian Express Pharma Pulse Award for “Overall Best Performance”.2006•EstablishedInjectablestate-­­of-­­the-­­artunit at Paonta sahib (HP)•Group Turnover surged up to Rs.512 Cr.2007•Launched Future Mankind, Special Mankind and VetMankind to cater to various therapeutic segments.•Acquired Magnet Labs Pvt. Ltd. and marked a marketing presence in antipsychotic segment.•Chrys capital became an investor partner.2007contd...•Bestowedas "Emerging Company of the year" at Pharma Excellence Award.•Teamed up with Roche Diagnostic for the marketing of product ’Accuchek Go’2008•Certifiedas the Most Potential& “A” Grade Vendor in Supply Chain Management by HINDALCO (Aditya BirlaGroup)•Achieved35% growth•Ranked 1st all over India as per Prescription/Doctor/Month2008contd...•Ranked 4th in India & 3rd in North India as per IMS Health &Stockiest Secondary Audit 21 brands at No. 1 position & 14 brands atNo. 2 Position as per IMS Health &Stockiest Secondary Audit 53 brands in top 5 positions as per IMS Health &Stockiest SecondaryAudit2010•Successfullylaunched OTC products like Prega News, Adiction,Unwanted-­­72,Dont Worry•Spread the wings globally with the launch of Mankind in Sri Lanka•EstablishedState-­­of-­­ArtmanufacturingUnit for liquid dosages & tablets2011•Incorporationof the R&D and Learning & DevelopmentCentre – Mankind Research Centre in NCR.•Successfullyacquired Longifene – the former brand of UCB Belgium•Launched a new division “Pet Mankind” for the basic Care, Health, Hygiene and Nutritional 
needs of Pets2011contd...•A step towards sustainabilitywith the instigationof the CSR wing of Mankind – Care Mankind•Crossed the threshold with the launch of Kustody Deodorant for women. Retained No. 1 rank in the number ofprescriptionsas per the P/D/M Audit Ranked 8th largest PharmaceuticalCompany of India as per IMS-­­Health.60brands placed amongst the Top 5 brands with 28 brands at no.1 and 22 brands at no.2 position2012•Aim to enter the league of top five in the pharma space in the next three years and reach thetop slot by 2016.•They plan to add another 1000 people to their workforce within two years as a part of their new growth orientation.
  • 16. MANKIND PHARMAApril 23,201316Exhibit 3: Number of Medical Representatives across industryExhibit 4: Prices of Mankind Drugs as compared to CompetitorsComposition Name Mankind Price Ranbaxy Price Cipla PriceGlaxo’s Augmentin Moxikind-CV 12.5 Moxclav 40.3 Advent 18Cetirizine Cope (30 Ml) 16.6 Okacet (30Ml) 22Amoxicillin (80mg) |Clavulanic Acid(11.4mg/1mL)Moxikind CvDrop37EnhancinDrops (10Ml)(1) 46.2Ofloxacin Zenflox Plus40Zanocin (60Ml) 69.9Amoxicillin (250 mg)| Clavulanic Acid (125mg.)Moxikind Cv3(75Mg)10.510.5Mox Clav3(75Mg)(10S) 33.53Pantoprazole (40 mg) PANTAKIND tab2.99PANTOSEC Dtab 7.13Cefixime (200 mg) Mahacef (200Mg) 6.5 OMNIX CV tab 20.95TelmisartanTelmikind (20Mg)1.35TELEACTtab 3.68CRESAR AMtab 3700060004500 4400Number of MRNumber of MR across industryMankind Cipla Ranbaxy Cadila
  • 17. MANKIND PHARMAApril 23,201317Exhibit 5: Financial Overview Starting with a turnover of Rs 3.8Cr in 1995 Mankind Pharma is expected to touch Rs2500 Cr in 2013. Mankind Pharmaceutical business has been growing at about 18 per cent annually,compared with the industry average of 13-14 percent. But the profit margin is growingat 12-13% compared with industry average of 20%. They operate at profit margin of 13-14% compared to industry average of about 25-30%.0500100015002000250030002007 2008 2009 2010 2011 2012 2013Mankind Pharma Sales
  • 18. MANKIND PHARMAApril 23,201318Exhibit 6: OTC and Personal Care brands of Mankind that have celebrities inadvertisementsProductCategory Brand AmbassadorManforce Condoms OTC Sunny LeonePrega News (Pregnancy testing kit) OTC Shilpa ShettyAdiction Deodrant Personal Care Neil Nitin MukeshKaloree 1 (sweetener) OTC Wasim AkramKustody (Face wash) Personal Care Genelia D’SouzaKustody (deodorant) Personal Care Bipasha BasuGas-O-Fast (for gastric relief) OTC Satish Shah
  • 19. MANKIND PHARMAApril 23,201319ReferencesIIM Indore Libraryhttp://www.maheshsundar.com/Home/maheshsundarcom---pharma-updates/the-upsurge-of-mankind-pharmahttp://articles.economictimes.indiatimes.com/2012-06-13/news/32215529_1_mankind-pharma-pharma-majors-consumer-brandshttp://www.business-standard.com/article/companies/mankind-pharma-set-to-tap-core-drugs-market-112071900076_1.htmlhttp://buildingpharmabrands.com/tag/mankind-pharma/http://www.financialexpress.com/news/advertising-sans-barriers/677381(http://www.mankindpharma.com/about.php#(http://www.business-standard.com/article/companies/mankind-pharma-set-to-tap-core-drugs-market-112071900076_1.html(http://www.dnaindia.com/money/report_mankind-on-a-mission-to-rewrite-the-pharma-story_1114225http://business.outlookindia.com/article.aspx?279322http://www.finance-trading-times.com/2008/04/mankind-pharma-ipo.htmlhttp://www.youtube.com