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PHARMACEUTICALS INDUSTRY ANALYSIS
OF BANGLADESH
Md. Rabiul Islam
Introduction
• Pharmaceutical Industry is one
the fastest growing industry .
• Introduced in 1980s in
Bangladesh.
• This bar shows industry growth
is 15% with the increase in
revenue which makes the
industry really attractive.
4/4/2017 2
Pharmaceuticals Industry Analysis Of Bangladesh
Introduction
• The industry is in growth rate with the increase in
sales, this makes other interested in coming to this
industry.
• New firm cannot enter in market but still there are
245 companies competing as rivals.
• 95% of local demand is covered by domestic
company, where as 67% of it is hold by top 10
companies.
Such as: Beximco, Square.
4/4/2017 3Pharmaceuticals Industry Analysis Of Bangladesh
Analysis (Industry Rivals)
Top domestic rivals such as Incepta Pharmaceuticals,
Beximco, Renata, and Eskayef have market share of 10.4%,
8.5%, 5.74, and 4.5% respectively.
4/4/2017 4Pharmaceuticals Industry Analysis Of Bangladesh
Analysis (Industry Rivals)
• Equal in size and
capability
• Drugs not
differentiated
4/4/2017 5Pharmaceuticals Industry Analysis Of Bangladesh
Analysis (Potential New Entrants)
• Can any company Based on resources
and competitive capabilities.
• High barriers to entry .(245 Companies )
• High risk of return on Investment due to
existing competitors.
• Degree of threat depends on-
1. The reaction of existing firms to new entrants
2. The strength of barriers faced by new entrants.
4/4/2017 6Pharmaceuticals Industry Analysis Of Bangladesh
Analysis (Potential New Entrants)
Acting Forces of Entry Barriers :
• Brand preference and customer loyalty (Painkiller Napa (produced
by Beximco).
• Government Regulations (Majority of the existing pharmaceutical companies patented
formulations for a lot of medicines they manufacture and distribute.)
• Economies of scale and experience curve effects (It
might take years for a new entrant to enjoy economies of scale . Hence barriers to entry for them are high)
4/4/2017 7Pharmaceuticals Industry Analysis Of Bangladesh
Analysis (Potential New Entrants)
A new entrant may be faced with various hurdles erected
by established businesses, such as:
• Capital requirements and financial resources
• Distribution product differentiation - established products, brands
and relationships
• Economies of scale - manufacturing, R&D, marketing, sales,
• Access to distribution channels: preferred arrangements
• Regulatory policy- patents, regulatory standards
• Switching costs - employee retraining, new equipment, technical
assistance
4/4/2017 Pharmaceuticals Industry Analysis Of Bangladesh 8
Analysis (Substitute Products)
• Generic drugs(patents expire
by 15-20 years)
• Herbal/Homeopathic
medicines(Long-term, cheap,
less side effect)
4/4/2017 9Pharmaceuticals Industry Analysis Of Bangladesh
Analysis (Substitute Products)
• Homemade Remedies
• Nutraceuticals-Fortified food
• Proficient use of health
information(innovative wearable medical
devices)
4/4/2017 10
Pharmaceuticals Industry Analysis Of Bangladesh
Analysis (Bargaining Power Of Supplier)
• 7 pharmaceutical raw materials suppliers in Bangladesh;
they are Pharma Raw Bangladesh, Dowla Brothers &
Company, Medinam, Nasana International, Sonewall
Limited, G. S. Enterprise.
• Suppliers generally have little room for negotiation, thus
they have low bargaining power.
• Large companies generally enjoy significant buying power
as the industry concentrates in a handful of large players.
• Companies in the pharma industry can switch from their
suppliers without incurring a very high cost.
4/4/2017 11Pharmaceuticals Industry Analysis Of Bangladesh
Analysis (Bargaining Power Of Supplier)
• The raw materials for manufacturing drugs are
commodity products in the chemical industry.
• Suppliers usually offer multiple products to the
manufacturer, which moderates pricing on rarer
materials and unique equipment.
• Recognizing labor as a supplier is important
because labor can exert great power by raising
prices.
4/4/2017 12Pharmaceuticals Industry Analysis Of Bangladesh
Analysis (Bargaining Power Of Buyer)
• Innovative high demand
medicines tend to set low
bargaining power of buyers
4/4/2017 13Pharmaceuticals Industry Analysis Of Bangladesh
Analysis (Bargaining Power Of Buyer)
• Consumers buy medicines at the
fixed price set.
• Doctors prescription does it all.
4/4/2017 14Pharmaceuticals Industry Analysis Of Bangladesh
Conclusion
The overall industry seems much attractive in terms
of growth rate, bargaining powers and revenue but
considering the startup cost, rules and regulations, it
needs a second thought. Although there are
substitutes but most of them are to be marketed by
the pharmaceutical industry itself.
4/4/2017 15Pharmaceuticals Industry Analysis Of Bangladesh

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Pharmaceuticals industry analysis of Bangladesh

  • 1. PHARMACEUTICALS INDUSTRY ANALYSIS OF BANGLADESH Md. Rabiul Islam
  • 2. Introduction • Pharmaceutical Industry is one the fastest growing industry . • Introduced in 1980s in Bangladesh. • This bar shows industry growth is 15% with the increase in revenue which makes the industry really attractive. 4/4/2017 2 Pharmaceuticals Industry Analysis Of Bangladesh
  • 3. Introduction • The industry is in growth rate with the increase in sales, this makes other interested in coming to this industry. • New firm cannot enter in market but still there are 245 companies competing as rivals. • 95% of local demand is covered by domestic company, where as 67% of it is hold by top 10 companies. Such as: Beximco, Square. 4/4/2017 3Pharmaceuticals Industry Analysis Of Bangladesh
  • 4. Analysis (Industry Rivals) Top domestic rivals such as Incepta Pharmaceuticals, Beximco, Renata, and Eskayef have market share of 10.4%, 8.5%, 5.74, and 4.5% respectively. 4/4/2017 4Pharmaceuticals Industry Analysis Of Bangladesh
  • 5. Analysis (Industry Rivals) • Equal in size and capability • Drugs not differentiated 4/4/2017 5Pharmaceuticals Industry Analysis Of Bangladesh
  • 6. Analysis (Potential New Entrants) • Can any company Based on resources and competitive capabilities. • High barriers to entry .(245 Companies ) • High risk of return on Investment due to existing competitors. • Degree of threat depends on- 1. The reaction of existing firms to new entrants 2. The strength of barriers faced by new entrants. 4/4/2017 6Pharmaceuticals Industry Analysis Of Bangladesh
  • 7. Analysis (Potential New Entrants) Acting Forces of Entry Barriers : • Brand preference and customer loyalty (Painkiller Napa (produced by Beximco). • Government Regulations (Majority of the existing pharmaceutical companies patented formulations for a lot of medicines they manufacture and distribute.) • Economies of scale and experience curve effects (It might take years for a new entrant to enjoy economies of scale . Hence barriers to entry for them are high) 4/4/2017 7Pharmaceuticals Industry Analysis Of Bangladesh
  • 8. Analysis (Potential New Entrants) A new entrant may be faced with various hurdles erected by established businesses, such as: • Capital requirements and financial resources • Distribution product differentiation - established products, brands and relationships • Economies of scale - manufacturing, R&D, marketing, sales, • Access to distribution channels: preferred arrangements • Regulatory policy- patents, regulatory standards • Switching costs - employee retraining, new equipment, technical assistance 4/4/2017 Pharmaceuticals Industry Analysis Of Bangladesh 8
  • 9. Analysis (Substitute Products) • Generic drugs(patents expire by 15-20 years) • Herbal/Homeopathic medicines(Long-term, cheap, less side effect) 4/4/2017 9Pharmaceuticals Industry Analysis Of Bangladesh
  • 10. Analysis (Substitute Products) • Homemade Remedies • Nutraceuticals-Fortified food • Proficient use of health information(innovative wearable medical devices) 4/4/2017 10 Pharmaceuticals Industry Analysis Of Bangladesh
  • 11. Analysis (Bargaining Power Of Supplier) • 7 pharmaceutical raw materials suppliers in Bangladesh; they are Pharma Raw Bangladesh, Dowla Brothers & Company, Medinam, Nasana International, Sonewall Limited, G. S. Enterprise. • Suppliers generally have little room for negotiation, thus they have low bargaining power. • Large companies generally enjoy significant buying power as the industry concentrates in a handful of large players. • Companies in the pharma industry can switch from their suppliers without incurring a very high cost. 4/4/2017 11Pharmaceuticals Industry Analysis Of Bangladesh
  • 12. Analysis (Bargaining Power Of Supplier) • The raw materials for manufacturing drugs are commodity products in the chemical industry. • Suppliers usually offer multiple products to the manufacturer, which moderates pricing on rarer materials and unique equipment. • Recognizing labor as a supplier is important because labor can exert great power by raising prices. 4/4/2017 12Pharmaceuticals Industry Analysis Of Bangladesh
  • 13. Analysis (Bargaining Power Of Buyer) • Innovative high demand medicines tend to set low bargaining power of buyers 4/4/2017 13Pharmaceuticals Industry Analysis Of Bangladesh
  • 14. Analysis (Bargaining Power Of Buyer) • Consumers buy medicines at the fixed price set. • Doctors prescription does it all. 4/4/2017 14Pharmaceuticals Industry Analysis Of Bangladesh
  • 15. Conclusion The overall industry seems much attractive in terms of growth rate, bargaining powers and revenue but considering the startup cost, rules and regulations, it needs a second thought. Although there are substitutes but most of them are to be marketed by the pharmaceutical industry itself. 4/4/2017 15Pharmaceuticals Industry Analysis Of Bangladesh