ACE 5.

0
ASSIGNEMENT
NAME: TARAN KUMAR
CLASS: BBA 6C
SUBMITTED TO: SIR FERHAN SYED
COMPANY: GSK(GLAXO SMITHKILINE)

Contents
Pakistan Pharmaceutical Manufacturing Association..................................................1
Introduction of Glaxo SmithKiline...............................................................................2
A) Impact of External Environmental Factors.....................................................................2
B) The strategic direction of the company..........................................................................3
C) The products being sold in Pakistan.............................................................................4
GSK sell its products under 3 categories that are Prescription medicines and vaccines, our
consumer healthcare products, Stiefel dermatology............................................................4
................................................................................................................................... 4
................................................................................................................................... 4
................................................................................................................................... 4
E) The profile of supply chain of the company....................................................................6
F) Last year financial performance of the company....................................................7
G) List down at least three questions that you would like to ask from the participants of ACE 5.0
during question-answer session....................................................................................... 7

Pakistan Pharmaceutical Manufacturing Association

Pakistan has a dynamic pharmaceutical industry. At the time of independence in 1947 there was
hardly any pharma industry in Pakistan. The best thing is today Pakistan has almost 400
pharmaceutical industries from which 25 companies are multinational. The Pakistan
Pharmaceutical Industry meets around 70% of the country's demand of Finished Medicine. The
domestic pharma market, in term of share market is almost evenly divided between the
Nationals and the Multinationals. The domestic pharmaceutical industry has shown a
progressive growth over the years, especially during the last decade. The industry has invested
significantly to upgrade in recent years and today the majority of the industry complies with good
manufacturing practices (GMP) in accordance with domestic and international orientation.
According to a representative of the Pakistan Pharmaceutical Manufacturers Association,
(PPMA), the pharmaceutical industry in Pakistan has experienced an impressive growth of 17
per cent during 2013, which is more than the global pharmaceutical average annual growth rate
of 8 per cent.
Although Pakistans pharmaceutical and healthcare sectors are expanding and evolving rapidly.
About half of the population has no access to modern medicines. Clearly this presents an
opportunity, but much more work needs to be done by the government and stakeholders in the
industry. The value of pharmaceuticals sold in 2007 exceeded $ 1.4 billion, equivalent to the
consumption per capita of less than US $ 10 per year and the value of drugs sold is expected to
exceed US $ 2.3 B in 2012.
The pharmaceutical industry in Pakistan is relatively young in international markets with annual
export business of over US $ 100 million in 2007. Pakistan Pharma Industry says units of
medicine are approved by regulatory authorities around the world. As the domestic market sales
on the international market have increased almost twice in the last five years. The
pharmaceutical industry is concentrated in an export vision of US $ 500 million by 2013. At the
same time, exports are also likely to be boosted by new regional and global opportunities.
The Pakistan Pharmaceutical Industry is a success story, providing high quality essential drugs
at affordable prices to Millions. Technologically, strong and self-reliant National Pharmaceutical
Industry is not only playing a key role in promoting and sustaining development in the vital field
of medicine within the country, but is also well set to take on the international markets.
The above was a brief introduction of Pakistan pharmaceutical Manufacturing Association.
Now, the company that I have chosen to search on is GSK (Glaxo SmithKiline)

Introduction of Glaxo SmithKiline

GlaxoSmithKline Pakistan Limited was created January 1st, 2001 through the merger of
SmithKline and French of Pakistan Limited, Beecham Pakistan (Private) Limited and Glaxo
Wellcome (Pakistan) Limited- standing today as the largest pharmaceutical company in
Pakistan. As an industry leader GSK are committed to their mission of providing patients quality
products to help improve their lives. As a leading international pharmaceutical company GSK
make a real difference to global healthcare and specifically to the developing world. GSK
believe this is both an ethical imperative and key to business success. Companies that respond
sensitively and with commitment by changing their business practices to address such
challenges will be the leaders of the future. GSK Pakistan operates mainly in two industry
segments: Pharmaceuticals (prescription drugs and vaccines) and consumer healthcare (overthe-counter- medicines, oral care and nutritional care).GSK Pakistan leads the industry in value,
volume and prescription market shares

A) Impact of External Environmental Factors

No doubt that the pharmaceutical industry of Pakistan is growing at a steady rate but many
external environmental factors are present which create impact on its performance. Here are
some impacts of external environmental factors on this industry
Political/ Legal Factors
The political and legal factors influence the pharma industry, the state intervention in the
industry, regulate the laws and regulations of the industry, control on the unfair trade practices
and unfair competition. Secondly, the formation of unions and communities and institutions to
protection of consumers, markets and companies. This also includes the subsidies that gets an
industry; the import / export duties, which are required to be paid.
Economic Factors
The economic factors influencing an industry/ organization include the income distribution, the
business cycles, the exchange rates, taxes and duties; and of course unfortunate economic
situations like inflation and depression. In Pakistan the majority of raw materials is imported.
This poses numerous problems for the industry. Firstly, it increases the costs of manufacturing.
The increase in costs makes the products unreachable for the consumers. The consumers then
look for cheap substitutes which mostly come in the form of smuggled, low quality
pharmaceutical products. Secondly, the cost of manufacturing/ procuring depends on the foreign
exchange rate. If the value of the Pakistani rupee depreciates in comparison with the currency
of the exporting country, the costs for Pakistan rise.
Social/Cultural Factors
The social and cultural factors include majorly the values and beliefs of people, and the various
subcultures existing in the population. People are concerned about their self-image as well as
their public image. If GSK create the wrong or inappropriate image in social group which work
against society or if company do any unethical work or effect society in wrong way this can
create negative image of company.
Technological factors
The technology is increasing day by day which is increasing the competition for the company
working in an industry. It is not necessary that a company can afford every technology because
the equipments and machines are expensive.
Moreover, another problem that was faced by the industry and which slowed down the growth of
the industry was that its prices were governed and regulated by the Ministry of Health. The
prices had been frozen by the Ministry. Even if there was a rise in costs, the industry was not
allowed to increase its prices without the orders of the Ministry. However, fortunately, after 1991,
the prices were deregulated and the domestic companies were allowed to fix prices matching up
to those of the multinational firms.

B) The strategic direction of the company

The business is focused around the delivery of three strategic priorities which aim to increase
growth, reduce risk and improve our long-term financial performance. These priorities are: grow
a balanced global business, deliver more products of value, and simplify the operating model.
Operating responsibly and ensuring our values are embedded in our culture and decisionmaking helps us better meet the expectations of society.
The aim of this company is to grow a balance business, Deliver more product of value, simply
the operating model and Responsible business.

C) The products being sold in Pakistan

GSK sell its products under 3 categories that are Prescription medicines and vaccines, our
consumer healthcare products, Stiefel dermatology
Prescription medicines and vaccines

Vaccines

Stifel Dermatology

D) How the company is competing in

Pakistani market and challenges it is facing in marketplace
GSK has its own Research and Development department which is it main strength, it innovate
new product in market and increase its market share and compete with market. Moreover, they
do not compromise on Ethics, they have strong ethical framework. The work on best quality
measures and do not compromise on health of people. They have trained qualified employees.
They manufacture according to the need of the people, what people want. They understand
their people first. This is how company is competing in Pakistani market.

The challenges that GSK is facing are that there is lot of competition in market. Every company
is coming up new technologies and innovate products. The raw material cost is increasing
everyday making the product expensive. The technology is increasing so companies are going
forward. Moreover, the biopharma concept is also increasing which is a big challenge. These
are some of the challenges that company is facing.

E) The profile of supply chain of the company

A supply chain is a system of organizations, people, activities, information, and resources
involved in moving a product or service from supplier to customer. The supply chain of GSK is
similar to any pharmaceutical company because the steps are same almost. The following is
supply chain profile of GSK.

Before the supply chain process starts. The research and development department work over
the products that need to be manufactured. The raw material is purchased according to it. So
the first step of supply chain is to buy the raw material. And the packaging material. Once it is
bought it is transferred in to manufacturing warehouses located in Karachi and other cities of
Pakistan. These are then moved in manufacturing units according to the product that are going
to be manufactured. The raw material is then processed into the plant inside the industry and
the finished products are made their. The finished product are first transferred to central
warehouse in Karachi and then it is transferred to the regional warehouse in different cities of
Pakistan. After this, from the warehouse it is moved to the distributors who sell it to the hospitals
and the retailers. The retailers than finally sell it to the consumers who consume them.

F) Last year financial performance of the company.

The last year financial performance of the company was really good. At a time when Pakistan's
pharma industry is being suffocated by the state's incessant regulation since 2001, GSK
managed to turn a profit in 2015 that marked its highest bottom line growth in seven years. Top

line popped 11 percent year-on-year, giving a phenomenal 59 percent burst in net earnings.
This was undoubtedly due to the company's golden product mix. However, GSK's export
business floundered over the year; as of the nine months ended September 2015, exports fell
24 percent year-on-year due to changes in the export regulatory regime and the post-election
situation in Afghanistan that caused supply delays. Moreover, the distribution cost, marketing
cost and other operational expense increased also but somehow, GSK managed to raise gross
margins by 26 percent (%).

G) List down at least three questions that you would like to ask from the
participants of ACE 5.0 during question-answer session.
Q1) How do you see the future of pharmaceutical industry in Pakistan?
Q2) How are the policies of Government Of Pakistan impacting the pharma industry in
Pakistan?
Q3) what does companies do to increase their market share in the industry?