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MENDEL UNIVERSITY OF AGRICULTURE AND FORESTRY IN

BRNO

FACULTY OF BUSINESS AND ECONOMICS

Strategic management of Pharmaceutical


Company

Bachelor thesis

Thesis supervisor: Author:


Ing. Tomáš Pyšný, Ph.D. Kristina Al Farová

Brno 2011
Acknowledgement:
I would like to thank Mr. Ing. Tomáš Pyšný, for supervising my bachelor
thesis and for his support and guidance throughout my work.
I declare that this thesis is my own work, which was written individually based
on the sources stated in the bibliography.

Brno 25th of May 2011 Kristina Al Farová.


Abstract
This bachelor thesis examines the strategic management of a pharmaceutical
company. The main aim of this work is to evaluate the current situation based
on the analysis of the external and the internal environment using PEST and
Porter’s five forces, EFE matrix, marketing mix and IFE matrix. This work will
include proposal of possible strategies based on SWOT matrix for the future de-
velopment.

Keywords
SWOT analyis, internal analysis, external analysis, strategic management.

Abstrakt
Tato bakalářská práce se zabývá strategickým managementem farmaceutické
společnosti. Hlavním cílem této práce zhodnocení aktuální situace, které bude
založené na analýze vnějšího a vnitřního prostředí. Pro tuto analýzu budou
použity PEST analýza, Porter’s five forces, EFE matice, marketingový mix a IFE
matice. Tato práce obsahuje návrh možných strategií pro budoucí vývoj založený
na SWOT matici.

Klíčová slova
Strategický management, SWOT analýza, Analýza vnějšího a vnitřního
prostředí.
Table of contents 5

Table of contents
1  Introduction 9 

2  Objective and methodology 10 


2.1  Objectives .................................................................................................10 
2.2  Methodology ............................................................................................10 

3  Theoretical part 12 


3.1  Origin and definition of strategy ............................................................. 12 
3.2  Management ............................................................................................ 12 
3.3  Strategic management ............................................................................. 13 
3.4  Strategic management process ................................................................ 13 
3.4.1  Strategic position and formulation .................................................. 15 
3.4.2  External environment analysis ........................................................ 15 
3.4.3  Internal environment analysis......................................................... 19 
3.4.4  Strategic alternatives ...................................................................... 22 
3.4.5  Strategy implementation and control............................................. 24 

4  Results 25 
4.1  Company’s characteristics ...................................................................... 25 
4.2  Company in general ................................................................................ 25 
4.3  External environment analysis ............................................................... 26 
4.3.1  PEST analysis .................................................................................. 26 
4.3.2  Micro-environment analysis ........................................................... 32 
4.3.3  Opportunities and threats identification ........................................ 35 
4.4  Internal environment analysis ............................................................... 37 
4.4.1  Organisational structure ................................................................. 37 
4.4.2  Marketing mix .................................................................................. 41 
4.4.3  Human resources ............................................................................ 45 
4.4.4  Strengths and weaknesses indentification ..................................... 45 
4.5  Strategy selection and formulation ........................................................ 47 
6 Table of contents

5  Discussion 55 

6  Conclusion 56 

7  References 57 

8  Appendixes 59 
List of figures and graphs 7

List of figures and graphs

List of figures
Figure. 1 Models of elements of strategic management 14

Figure. 2 Porter’s model 19

Figure. 3 Porter’s value chain 22

Figure. 4 Organisational structure 41

Figure. 5 IE matrix 48

Figure. 6 Cash flow projection of introducing branded and injectable


products to US market 53

List of Graphs

graph. 1 Real GDP growth rate. 27

graph. 2 Infaltion rate. 28

graph. 3 Life loss by possible causes. 31

graph. 4 Revenues by segment for 2010 43 


8 List of tables

List of tables
Table. 1 Functional classification of organisational capabilities 21

Table. 2 Unemployment rate. 28

Table. 3 Percentage of pupil attending different educational levels


29

Table. 4 EFE Matrix 37

Table. 5 Product description and number of offered products 42

Table. 6 IFE Matrix 47

Table. 7 SWOT matrix 52

List of tables in Appendixes


Table. 8 Size of population according to age structure. 59

Table. 9 Number of inhabitants and population growth rate. 59

Table. 10 Status of the labour market of women aged 15+ and


educational level for year 2008 59
Introduction 9

1 Introduction

“Strategy is not a detailed plan or program of


instructions; it is a unifying theme that gives
coherence and direction to the actions and
decisions of an individual or an
organization.”
GRANT, Robert M.

Every business must keep on getting adapted to its competitive environment, in


order to survive and also to succeed on the market. There are some ideals that
organisations try to keep unchanged to provide a guidance in the process of
strategic management; these ideals are in form of business vision and mission
On the other hand the world is in a constant change. Regardless to which type of
business field we are examining. Environmental changes can be driven by the
forces of consumer needs, technology innovation, economic growth, politics and
many others. Adaptation to the changing environment is the greatest challenge
any company can face. Top management of these enterprises must understand,
predict and manage these changes in order to survive and to achieve
competitive advantage over the others.
A strategy is analysed, implemented and controlled in order to direct and
achieve the enterprise’s mission, vision and adaptation of the changing
environment. It is important to choose the right strategy which is can lead for
success of the short-range and long-term objectives and targets of the
enterprise.
Pharmaceuticals help in improving people’s health lives. This business field is
considered to be one of the most profitable businesses but also the one which
has the biggest responsibility of providing safe treatments to patients.
Pharmaceutical companies in Jordan are still growing and adapting to the new
fast developing technologies to provide medicines with good quality.
The company Beta pharmaceutical (plc.) provided me with necessary internal
information that I based my thesis on to elaborate on its current internal and
external situation and suggest possible improvements for the company. Due to
the company’s management wish the name of the company is not mentioned
and it is stated as a fictive company with name Beta.
10 Objective and methodology

2 Objective and methodology


2.1 Objectives
The main aim of this thesis is to perform a strategic analysis of a pharmaceutical
company, evaluate its current situation on the market, characterise the company
and its mission, vision and goals. In addition to that, an analysis of internal and
external environment is performed to suggest suitable strategies in order to
improve company’s position on the market.
Furthermore, the company is discussing to implement one main strategy
regarding product portfolio. The management wants to enlarge its product
portfolio and launch new products to the market. According to my analysis
based on IE matrix I will approve or decline this hypothesis: is the company
able to enlarge its product portfolio. I hope my thesis will be a value to the
company and can give possible solutions that can help the management of the
company.

2.2 Methodology
For this particular topic which is strategic management of pharmaceutical
company, I based my thesis with reference to books, websites and publications
connected to this particular topic in order to get a background, and better
understanding of strategic management, its process and types. Surveyed
literature is listed in the “references” section of the thesis.
Based on the survey of literature related to this topic, the theoretical part is
applied in the “results” section on the selected company Beta, this chapter will
include the characterise of Beta company and focus on the process of strategic
management. It will contain the followings:
 General information about the company, including business mission, goals
and vision
 External environmental analysis, which based on PEST analysis and
competitive Porter’s analysis, as the external environmental factors can
influence the pharmaceutical industry and the company itself.
 Internal environmental analysis, which includes in it organisational
structure, 4P’s of marketing mix (product, price, place and promotion) and
analysis of the characteristics of human resources.
 Strategies selection and recommendation are done by using helpful tools
such as SWOT matrix (Table.7), Internal–External matrix (IE) which you
can refer to (Figure.5), and alternative strategies which include kotler’s
competitive strategy, and Porter‘s generic strategy for further development
and growth of the company. Internal–External matrix (IE) weighted scores
Objective and methodology 11

has on the X axis of the IFE total score and on the Y axis of the EFE total
score. The cells have the following characteristics:
1. Cells I, II and IV are characterised to “growth and build”. Main strategies
are aggressive and intensive tactical strategies. Includes products
development, market penetration and development.
2. Cells III, V and VII are characterised to “hold and maintain” tactical
strategies should be focused on penetrating new markets and developing
new products.
3. Cells VI, VIII and IX are characterised to “harvest or divest” a strategy of
asset reduction, withdraw a product or the business from a market.

Discussion and conclusion will be followed after the results section which will
consider which strategies will be the best to be implemented in the company.
12 Theoretical part

3 Theoretical part
3.1 Origin and definition of strategy
The word strategy is originally derived from Greece; it appeared during the time
of a leader named Kleisthenes (508-7 B.C), “stratçgos” was used in the military
aspects to defeat enemies. This word derives from:
“stratos” – meaning an army
“agein” – meaning leading/guiding

Over the years the form of using this term has been changed, strategy word was
expanded into business as many authors argued whether it is a quantitive or
qualitative process (Žufan, 2005).

Strategy as can be defined as following:

Strategy is connected with the long term direction it is explained in a statement


of an organisation, which explains the plans of the organisation that will be used
to achieve an advantage over competitors. Competitive advantage is gained
through configuration of available resources within a changing environment,
these wanted results or achievements are mainly done to satisfy the market
needs and to fulfil the organisation’s stakeholder expectations (Johnson and
Scholes, 2008).

Mintzberg defines strategy as plan that sets up the most important objectives,
policies and sequence of actions as a united form. When a strategy is well
structured for an organization helps to achieve outcomes that are based on the
organization’s internal competence; this can be gained through allocating and
ushering its resources, in addition to awareness of the changes of the
unknowable surrounding environment and of the competitive organisations
(Mintzberg and Quinn, 2003).

3.2 Management
According to G.A Cole management doesn’t have an exact definition, he
explained management as a general approach that result of it is to reach desired
objectives of an organisation by anticipating, planning, and followed by
organising the selected plans and controlling available resources (Cole, 1990).

The main business-management concept relates human recourses, motivation


and leading with business activities, its process is connected with decisions
made to do things and getting it achieved by people. Human resources can
manage and direct other resources to be effectively used therefor people are
Theoretical part 13

considered to be the most important available resource for the managers (


Armstrong and Stephens, 2005).

3.3 Strategic management


Strategic management is a process that continuously examines the present and
the future environments of an organization, its objectives are formulated,
implemented, and the decisions that concentrates on achieving the
organizations goals are controlled and evaluated for the present and future
environments (Smith, Arnold and Bizzell, 1991).

According to Macmillan strategic management is explained as a combination of


an art and skill. It is a skill because knowledge can be learnt and techniques can
be used to achieve competence. It is art because it deals with an unpredictable
future which is connected with people’s hearts and changing minds ( Macmillan
and Tampoe, 2000).

3.4 Strategic management process


Strategic management process consists of three basic elements understanding
the strategic position of an organisation, making strategic choices and finally
transforming strategy into action to achieve the organisation’s objectives.
Strategic position is connected with analysing the organization’s strengths and
weakness through viewing the influence of its internal capability, external
environment and stakeholder’s expectations. Internal capability is made up of
competences and resources. The external environment is mainly connected with
economic, social, political, and technological variables. Influence level of the
stakeholder’s expectations on the organisation’s mission and vision values.
Strategic choices underlie future strategy options in terms of strategy direction
and methods used at both business and corporate level.
Strategy into action is a the transformation process of the chosen strategies into
working reality, including strategic development process of the organisation,
structuring the organisation and allocating resources i.e. information, people,
finance and technology etc., in separate areas achieve successful performance,
controlling and managing strategic changes (Johnson, Scholes and Whittington,
2008).
Strategic management comprises nine critical tasks: (John A. Pearce II and
Richard, 1991)
 Formulate the mission, vision, and goals of an organisation
 Develop a profile that reflects the capabilities and the organisation’s
internal resources and conditions
14 Theoretical part

 Understand the external environment, including competitive and


contextual factors
 Analyse possible options by matching resources with the external
environment
 Identify desirable options by evaluating each option according to the
mission
 Select long term objectives and strategies that will achieve the desired
options
 Develop annual objectives and short-term strategies that are compatible
with the long-term objectives and strategies
 Implement strategic choices by taking into account budgeted resources
allocations in which the matching of tasks, people, structures and
technologies is emphasized
 Evaluate the strategic process and use the successful process as the input of
future decisions making.

Figure. 1 Models of elements of strategic management


Source: Žufan 2006
Theoretical part 15

3.4.1 Strategic position and formulation


The process of strategic position and formulation is used to set up organisation’s
mission, vision, objectives, strategy and values. The organisation analyse who
and how to involve and allocate resources, competences and finance that are
required to convert chosen strategies into action. Decision-makers identify
feasible and appropriate alternatives and suitable options by using the strategic
inputs which consists of external and internal environment. Analysis of external
and internal environments is done to judge and deicide which strategies will be
implemented. (Morden, 2007)

Business mission
Business mission statement is simply the answer of the question: why the
organisation exists? The answer defines the unique purpose and identity of an
organisation. The mission is a specified statement that describes the product or
service areas in which the company attempts to satisfy customer’s needs.
Mission is very important to be set correctly as it reflects in a way the priorities
and the decision making of the managers. (Thompson and Arthur A., 1993)

Business vision
Vision describes future plans of an organisation; it is based more on the
managers believes who wish to achieve particular visionary goals in the long
run. Some of these goals can be underestimated or out of reach for realization,
at the end phase managers set up challenging targets in which they see the
organisation to become in long term future. (Plamínek, 2000)

Business goals (objectives)


Goals of an organisation state what targets wanted to be achieved and when
they are supposed to be accomplished. General objectives set the nature,
viability, and the direction of the organisation but it doesn’t explain how these
goals should be achieved. Goals are usually set in a complex hierarchy were it
states the targets of each organisational unit and subunits. (Mintzberg and
Ghosal, 2003)

3.4.2 External environment analysis


The external environment is divided into macro-environment and micro-
environment. Macro-environment consists of uncontrolled factors that are
located outside the frame of an organisation, and micro-environment of factors
that can be controlled and located inside the organisation. To do the analysis it
requires to gather a large amount of information, it can be collected from
outside sources or may even gathered inside the organisation itself, such as
marketing, finance, and human resources departments, budget, cash flow
statements, customer surveys etc.
16 Theoretical part

The aim of the external analysis is to help the organisation to understand and
evaluate the situation of the external environment in order to improve
organisation’s strategic planning and to anticipate critical threats and
opportunities that can face the organisation. The analysis is approached by
using the most known key tools which are the PEST analysis, and competitive
analysis using the Porter’s five forces model. (Capon. C, 2008)

PEST analysis
This analysis consists of four factors Political and legal, Economic, Socio-
cultural and Technological: (Dransfield. R, 2005)
 Political and legal: consist of governmental bodies and national bodies that
make decisions and influence the political viewpoint in connection on how
the businesses operate. The government has an influence on the fiscal and
legal polices in addition on alliance and agreements.
 Economic factors: the economic environment is mainly influenced by the
domestic economic policies and global economic trends; there are several
factors which contribute to the economic environment such as economic
growth, unemployment, inflation, energy prices, income distribution and
many other economic trends.
 Social-cultural factors: is based on analysis of society, it the analysis of
population growth, demographic issues, education, religion, migration rate
and other demographic changes in relation with cultural behaviour and
trends.
 Technological factors: refers to improvement, rate of technology change in
manufacturing and business processes that should be monitored in relation
to competition particularly with cost- effectiveness and performance of the
techniques, equipment, and materials used in business processes.
Micro-environment analysis
The five frame forces were introduced by Porter to analyse an industry
structure, and to assess the attractiveness of the industry. It consists of the
following five forces:
1. Threat of entry: there are several barriers that protect incumbents from
new entrants who need to overcome these factors in order to compete with
them. The higher the barrier levels are the more difficult for the new
competitors to enter the market. The typical barriers are: (Johnson,
Scholes and Whittington, 2008)
1.1. Scale and experience. One of the most important barriers in industry is
economies of scale, for new entrants is very difficult and expensive to
reach large economic scales as incumbents, therefore new entrants
must invest large financial resources on capital requirements for
example in R&D, research costs are large causing entrants to have
higher unit costs in comparison with the same volume produced by
Theoretical part 17

incumbents. Experience affects the unit cost as new entrants don’t


have much experience in doing things fast and efficient at lower costs.
1.2. Access to supply or distribution channels. Depending on the type of
business there are limited suppliers or distribution channels as existing
manufacturers in those industries have the control over them; it can be
done in several ways through vertical integration or simply through
customer-supplier loyalty. Now days in several businesses entrants
overcame this barrier by selling directly to consumer through e-
commerce on the internet.
1.3. Legislation or government. Entry to industries can be controlled or
limited by legal restraints it can done in several forms such as in a form
of patent protection or limitation of the access of raw materials or
markets regulation. These restrictions by the government can be affect
entrants directly such as using tariffs or indirectly by putting standard
measures on pollutions and safety regulations.
1.4. Differentiation. A product or a service is differentiated when it has a
higher perceived value than other competitors, it contributes to brand
identification. Differentiation increases customer loyalty and helps to
reduce the threat of entry.
2. The threat of substitutes: managers should not neglect the threat of
substitutes as customers can switch to alternatives therefore it can reduce
the demand for these particular products. There are two points which
should be considered about substitution threat:
2.1. The price/performance ratio. Substitutes can be a threat when it offers
an advantage performance even though its price can be higher;
therefore the ratio of price to performance is more valued than the
price difference alone.
2.2. Extra-industry effects. Substitution threats are not coming from the
competitors’ industry these are rather competitors’ products of service
but threats of substitutes come from the outside industry of the
existing incumbents.
3. The power of buyers: sometimes buyers or customers have a high power
with several conditions which will be explained in the following; these
customers can affect supplier’s profits and lower them.
3.1. Concentrated buyers. Buyers who are few but they considered to be the
major purchasing power of sales. Therefore they can pressure suppliers
for trivial purchase as their power is likely to increase because of their
high purchase percentage.
3.2. Low switching costs. Switching suppliers is done easily were buyers are
offered lower costs mainly for weakly differentiated products therefore
in these cases customers are in favour for better price negations with
suppliers who are in desperate for their business survival.
18 Theoretical part

3.3. Buyer competition threat. This threat is based on what’s so called


backward vertical integration, in this case buyers provide themselves
with facilities that can supply their needs therefore they are in
advantage to gain more power over their suppliers as they move back
the sources of supply and in addition to that they might even acquire
better quality and prices for themselves than purchasing these sources
from suppliers.
4. The power of suppliers: are those who supply sources that are for the
production of a product or a service of an organisation. Each organisation
needs different combination of sources depending on the type of business;
it can be supplied form more than one supplier, resources forms can be
such as raw materials, labour, financial resources and equipment etc. There
are several factors than can increase suppliers power:
4.1. Concentrated suppliers. Suppliers can have power over buyers when
few dominating producers supply the product or service to buyers.
4.2. High switching costs. Buyer can be dependent on the supplier when it
is disruptive and highly costly to switch from that supplier to another.
4.3. Supplier competition threat. They can become a threat especially to
intermediate suppliers when main supplier can reach closer to the
ultimate customer, as it is known as forward vertical integration.
5. Rivalry among existing competitors: high degree of rivalry between the
existing competitors decreases the potential profit. The degree of it depends
on two factors: (Michael E. Porter, 1990)
5.1. The intensity of competition. Rivalry is high when there are many
competitors with similar size and equal power, also it can be high in
case of slow growth of the industry in the market as competitors are
struggling for their share on that market. Other factors that can
contribute to high rivalry are diverse competing approaches, differing
goals or commitments to goals that are beyond economic performance,
such as prestige, personality ego of owners or employment in case of
state companies
5.2. Basis of competition. Dimensions on which competition occurs and
price competition are the main basis of competition. Price competition
is more likely to occur when the products or services are almost
identical, competitors try to keep and attract customers by price cuts.
Other reasons of price competition are capacity expansion,
perishability of products, also it used in cases where some industries
fixed costs are high but their marginal costs are low.
Theoretical part 19

Figure. 2 Porter’s model


Source: Porter, 1990

3.4.3 Internal environment analysis


This analysis is concerned with identifying and analysing internal resources and
capabilities of an organisation. Capabilities are the nature of performance and
collective skills that implement the resources to undertake a particular
productive activity. Resources are divided into three types: tangible, intangible,
and human resources. (Grant, 2010)

Tangible resources consist of physical assets and financial assets that are
present in the organisation.

Intangible resources consist of intellectual assets, reputational assets, finally


organisational culture that is connected to the values, social norms and
organisational traditions. In many industries intangible resource are more
valuable and invisible than tangible.

Human resources employees who work in the organisation provide their skills,
knowledge, attitudes and experience. In addition to that, human resources have
major contribution in achieving goals by their willingness to communicate,
motivate and collaborate at work.
20 Theoretical part

There are two analyses which help with the identification of organisation’s
capabilities:
 Functional analysis. According to each of the organisation’s functional
area; capabilities are identified in so called functional classification
approach of organisational capabilities.
 Value chain analysis. Porter represented the categories of activates in the
organisations in a chain, these activities are distinguished according to
their priorities. Primary activates are those directly connected in the
transformation of inputs into product and services for customers and
providing after-sales services. Support activities are those linked with the
primary activates to improve their efficiency and provide better product or
service differentiation.
Theoretical part 21

Functional area Capability


Control of financial assets
International partnership
coordination and overall
CORPORATE
organisation’s management
FUNCTION
including acquisition
management
Usage of comprehensive
MANAGEMENT
systems that contribute to
INFORMATION
decision making
Research application
RESEARCH &
Innovation and products
DEVELOPMENT
development
Level of volume
manufacturing, labour
OPERATION efficiency, operational
improvement and inventory
PRODUCT DESIGN Design capability
Managing of the existing
brand
Quality promotion for
MARKETING reputation
Observation of market trends
and Responsiveness to them
Execution of sales promotion
and their effectiveness
Speed and efficiency of order
SALES AND processing
DISTRIBUTIO Distribution speed
Quality of the customer
service and its effectiveness

Table. 1 Functional classification of organisational capabilities


Source: Robert M. Grant, 2010

Value chain model


Primary activities are made of the followings: (Porter, 1990)
 Inbound logistics. Activities that are related to the internal transportation
system, those activities are connected with input resources being sorted,
distributed to products or services.
 Operations. Activities connected with manufacturing and transforming of
inputs into final products or services. Products packaging, testing and
printing can be included to those activities.
22 Theoretical part

 Outbound logistics. Activities that related to the collection, sorting, and


distribution of the final products to the customers.
 Marketing and sales. Activities that provide means by which the customers
notice the products and make a purchase, activities such as advertisement,
selling, promotions and pricing, etc.
 Service. Provided services to enhance or maintain product value such as
product repair, installation, parts supply and other.
Support activities are divided into four generic activities:
 Procurement. Process of purchasing inputs, these inputs should have the
appropriate costs, quality and specifications that are needed for production
 Technology development. Improvement of processes by including
technologies into know-how, and research development.
 Human resource management. Activities connected to employees such as
training, rewarding, recruiting.
 The firm’s infrastructure. Consists of the formal structure of the
organisation as it is designed to manage and support the whole value chain.

Figure. 3 Porter’s value chain


Source: Porter, 1990

3.4.4 Strategic alternatives


The firm have large number of strategic alternatives; the best choice is selected
depending on available resources, the structure of the industry, and the initial
position of the firm among its competitors. The choice has to be in relation to
the parameters identified by the process of external and internal analysis. These
factors influence the strategic choice of the available alternatives. Furthermore,
well-chosen alternative strategies can maximise the objectives of the firm but
keeping in mind that optimal strategies can change over time. ( Porter, 1976)
Theoretical part 23

Kotler’s competitive strategies


To gain further information on how to choose organisation strategy is by
classifying the organisation’s competitors and itself according to the following
roles: (Kotler, Shalowitz and Stevens, 2010)
 Market leader. The main aims of the market leaders are to occupy the
largest market share, and be the leader in connection with product
innovation and price changes. Leaders try to protect and strengthen their
position by extending, or defending market share, or by extending the
whole market through market penetration, market segmentation, and
searching for new customers in other geographical areas.
 Market challenger. Challenger’s objective is to increase its market share by
attacking the market leader and others directly or indirectly through
offensive strategies implementation.
 Market follower. The strategies of the market follower are set to avoid
direct competition with the market leader, to maintain their market share,
and to keep their current buyers through imitation of the market leader.
 Market nicher. Typical nichers are small organisations that concentrate on
small particular market segment that requires special skills and resources
therefore this segment is ignored by the larger organisations, bringing an
opportunity to the nicher to grow and be able to defend itself by customers
loyalty.
Porter’s generic strategies
According to Porter an organisation can achieve an above-average performance
by possessing two basic types of competitive advantage which are low cost or
differentiation. In consonance with the type of business and the aimed market
segment, Porter introduced the following three generic strategies: ( Mintzberg,
Ahlstrand and Lampel, 2001)
 Cost leadership. The aim of this strategy is to increase the market share by
keeping low-cost structure of the production in an industry over
competitors; it can be achieved through usage of large scale of operations,
experience, and reduction of production costs.
 Differentiation. This strategy aims for uniqueness of the product or service
over competitors. The firm relies on customer loyalty as it offers better
quality and performance but at higher prices.
 Focus. This strategy concentrates on specific market segment. The firm
tries to gain this narrow segment by using either the strategy of cost
leadership or differentiation, or by combining both of these strategies.
24 Theoretical part

3.4.5 Strategy implementation and control


Strategy implementing function is based on the skills needed to achieve wanted
results on schedule. Implementation of the strategy is the most time consuming
and complicated task in strategic management, as it combines together strategic
management plans and actions within the organisation. Strategy is executed by
administrative factors that are related to the internal environment, these
essential factors include:
 Building the organisation to be adequate to carry out the strategy well
 Budgets development in order to pass resources into internal activities
 Personnel motivation by several ways that encourages them to energetically
work and achieve wanted targets, furthermore modification of duties and
behaviour within the work place
 Giving rewards when targeted goals are achieved
 Creating favourable work environment that helps with strategy
implementation
 Inducing supportive procedures and policies
The goal of those administrative factors is to create stronger fits between
strategy execution with actions and changes of the internal operating practices
to accomplish targeted objectives. Depending on the strategy requirements, full-
implementation can take longer than several months or even years.
After strategy implementation, the performance of the process is evaluated, and
the current situation of the strategy is reviewed in connection with the short-
term and long-term objectives. Furthermore, continuous search for better
strategy execution and corrective adjustments to progress the achievement of
targeted results can be included in this stage. Sometimes performance needs to
be modified because of changing conditions or setting up of new objectives by
the decision-makers. Therefore the function of control strategy and feedback is
very important for the organisational success (Thompson, Arthur A., 1993).
Results 25

4 Results
4.1 Company’s characteristics
Beta Pharmaceuticals (plc.)1 is a public limited company founded located in
Jordan. This company manufactures and markets wide range of generic,
injectable and in-licensed pharmaceutical products. The company’s business is
mainly focused on the Middle East and North Africa (MENA), but also operates
across USA and Europe.

Products are developed for cardiovascular, hormonal, anti-infective, CNS,


diabetes, respiratory and other areas. They are provided in more than 700
dosages strengths in various forms such as solid, semi-solid, liquid and
injectable products.

Products are mostly manufactured in Jordan but also in different facilities


which belong to Beta in Libya and Algeria. The company is continuously
expanding its manufacturing capabilities and wants in the future to acquire new
capitals in the MENA region.

Research and development sector is one of areas in which it invests in as


currently has centres that helped in expanding of products group’s portfolio.
Forty products are manufactured and/or sold under license. R&D helps in
improving quality and maintains their high standards which the company
developed their reputation on over the years.

4.2 Company in general


Beta has an image of how the company should be directed in terms of its
business mission, vision and strategy.

Mission
Beta’s mission is “we are committed to improving people’s lives”. It focus on
providing patients with “better access to high quality, cost effective medicines in
key therapeutic areas” for daily basis.

The company defines clearly what type of product to which market and to whom
it is provided.

Vision
Defines the main economical objective and interest, in the following vision
status:

1 The company Beta Pharmaceuticals (plc.) will be further stated in the thesis as Beta
26 Results

Build Beta into a “world class and leading specialty pharmaceutical company”
through organic growth and by acquisitions.

Strategy
The main strategy for growth is to develop diverse and strong product portfolio
according to the changing needs of patients of the market. Currently Beta is
more focused on therapeutic targets of the cardiovascular and metabolic areas.
Decision of the product portfolio is done easier by the help global research as
patient’s needs are identified based on the region where ageing population with
changing life style are examined.

Maintain the high quality standards of manufacturing capabilities by passing


inspections by regulators. Some facilities have been approved by FDA, therefore
to invest further in training Beta’s workforce to reach better goals. Invest more
in active pharmaceutical ingredients (API) sourcing team which focuses on
identifying cost effective suppliers and high quality of needed raw materials.

Other key parts of the strategy are expanding geographic reach by integrating
acquisitions and pursuing further acquisitions especially in the MENA region so
that the company will strengthen its position in the market. Second Improving
partnerships and relations with stakeholders within the healthcare value chain.
Enlarging the in-licensed product portfolio to enable further launching of new
innovative medical treatments.

4.3 External environment analysis


The macro-environment and micro-environment factors can have positive
and/or negative impacts on the company; these impacts can influence the
management decisions that will affect the performance of the company.

4.3.1 PEST analysis


In the following section macro-environment factors are identified and analysed
by using PEST analysis.

Political and legal factors


Government have a direct influence on the political situation that can affect
several factors such as political stability, exchange rates, tax policies,
international trade regulations, unemployment rate, inflation rate etc. Jordan
itself is considered as a moderate stable country as it does have a democratic
structure but on the other hand, it is located in quite unstable and risky political
zone by the fact that there is still Palestine-Israel disputes, and recently there
are lots of demonstrations against Arab governments in these countries, this can
influence the local business in negative way.
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There is a direct influence on the legal system by the Islamic law and customs.
In relation to pharmaceuticals, raw materials must not consist of pork
substances, which it is possible to be used in other countries.

Economic factors
GDP is the key indicator of how well the country is economically performing.
Jordan faced problems after the Gulf War in 1991 because during the 90’s oil
was imported from Iraq at concessionary prices. Since 2003 oil was imported
primarily some Gulf Cooperation Council member countries at market prices.
After 2003 GDP real growth rate started to improve gradually due to
implementation of significant economic reform policies, such as opening the
trade regime by singing free trade agreements with many organisations,
privatizing state-owned companies, lowering tax in Aqaba Special Economic
Zone (ASEZ) for private sector lead to growth of foreign investments.
The highest rates of GDP growth with 6.30% in 2007 as export and service
sector were having best results. Tourism contributed in the results as it reached
its highest rate when Petra was announced as new Seven Wonders of the Word.
The past two years because of the global economic crises Jordan's GDP growth
significantly dropped but it is expected to grow back slowly.

graph. 1 Real GDP growth rate.


Source: own work 2011 based on data from indexmundi

Inflation rate has been increasing over the last 7 years in high rate especially in
2009 inflation rate was dramatically high, it reached almost 15% . Jordan was
annually suffering from high inflation rate due to combination of local and
global factors. High rate was due to oil and to electricity because Jordan imports
almost all of its oil affecting inflation by the high prices. Another reason is the
28 Results

increasing influx of Iraqi and Palestinian people, as they keep on immigrating to


the country therefore they increased the demand for housing and prices causing
housing shortage. In 2010 consumer price went down to -0.70% as GPD rate,
energy and transport prices were lower.

graph. 2 Infaltion rate.


Source: own work 2011 based on data from indexmundi

Unemployment rate is relatively high even though the Jordanian economy has
improved. This problem could be explained by many reasons, starting with high
population rate as in most of cases one or more member’s supports the whole
family. Furthermore, wrong distribution of working power in the labour market
as the most of Jordanians are highly educated, either they immigrate to the Gulf
or they don’t do manual work, as most of the manual work is done by
immigrants from neighbouring countries.

Year 2003 2004 2005 2006 2007 2008 2009 2010


Unemployment
16 16 15 12.5 15.4 13.5 12.6 13.4
rate (%)

Table. 2 Unemployment rate.


Source: own work 2011 based on data from indexmundi

Another economic factor is exchange rate. Since 1995 the Jordanian Dinar has
been pegged to the U.S. Dollar. The exchange rate has been fixed in constant
trend at 0.708 (buy) and 0.710 (sell) Dinar to the dollar. The Dinar fluctuates
against other currencies according to market force of supply and demand
factors but due to the policy of maintain JD stability, exchange rate doesn’t rise
over major currencies. This can be beneficial when American dollar is
depreciated the Dinar can benefit in terms of increase rate of exports, as the
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prices of Jordanian goods will be cheaper for foreigners. In addition to that


stability of exchange rate can create confidence in the domestic currency and
thus encourages foreign investments into the country.

Socio-cultural factors
The age structure of Jordan is quite different than it is common in Europe, as
the population is relatively young; it is estimated that 59.9% of the population is
between 15-64 years old and only 4.8% older than 64 years (Table. 8) but it is
expected that the rate of older population will increase rapidly over the next
years. In addition to that, Jordan’s population growth rate is stable but high
around 2.2% for the past 4 years (Table. 9). According to the Jordanian
statistical office for 2010 there are 6 113 000 inhabitants with 40% who are
economically active.

Education plays a major role in the social factors one of the indicators is literacy
rate which is estimated with 92.8 % of the total population. Second indicator
can be education level. According to UNESCO’s standard classification of
education the table below shows the change of the percentage of inhabitants in
different education level in years 2002 and 2008. Represented by Gross
Enrolment Ratios (GER) it is the number of students attending a level of
education regardless to their age expressed as a percentage of the whole
population.

GER(%) GER(%)
Educational
for for
level
2002 2008
Pre-primary
33 I36
enrolment
Primary
101 97
enrolment
Secondary
87 88
enrolment
Tertiary
30 41
enrolment

Table. 3 Percentage of pupil attending different educational levels.


Source: own work 2011 data from UNESCO institute of statistics, Note: Figures do not add in
columns

The data show that more students are getting more educated, it is more noticed
especially in the percentage of pupil who enrolled to the Tertiary level which
increased by 11% in 2008, in comparison with 2002 this indicates that people
are focusing more on the higher educational levels. Higher literacy and
educational level helps the country to establish a better working force that can
provide more effective results in the economy.
30 Results

Factor that can be considered to contribute negatively to socio-culture such as


cultural roles of women as their participation in the labour force are low because
of the cultural traditions and the influence of the Islamic religion in Jordan. It is
believed that women’s role mainly to be housewives. 85% of women above the
age of 15 in 2008 were inactive in the labour market, also 34.2% (table.10) of
women who have Bachelor degree and higher are inactive which indicates that
they are highly educated but inactive in the labour market. Recently there has
been a change about this idea due to increase of living costs and it is expected to
raise their level of contribution on the market.

Health indicators are very important to Beta as they are majorly connected with
its business. In addition to age structure and life expectancy, identification of
major causes of death can bring an opportunity to Beta to focus more on areas
where it can produce products that can contribute to decrease the rate of life
loss. According to World Health Organization life loss in relation to health can
be divided into three sectors:
 Communicable. Consists of infectious diseases that are able to transmit
form one person to another. In the graph it is about 29% of people die
because of it in Jordan.
 Non-communicable. Also known as (NCD) referred as chronic diseases
which are non-infectious with slow progression, they include cancer, heart
diseases, diabetes, etc. this type of diseases are the most common causes of
death as they represent 53% which is the highest rate of cause of death in
relation to health.
 Injuries. Mainly related to physical injuries which have the minimum rate
of cause of death.
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graph. 3 Life loss by possible causes.


Source: own work 2011 based on data from WHO

Furthermore, Beta can also consider:


 Rate of smoking, pollution and changing of health life style.
 Influx of qualified immigrants into the market.
 Changing of attitudes of Jordanians in relation to work conditions and their
expectations.
Technological factors
Technological advancement should be continuously tracked and observed in
order to help the company to achieve better production and higher quality of
products. Modern technology and scientific advancements are forcing the
industry to increase its spending on R&D in order to encourage innovation. In
addition to that, competitive advantage can be achieved when technology is
timely well implemented in effective and efficient way.

Time considered being a critical factor in innovation and development,


therefore implementation of communication technologies in pharmaceuticals
are important tools for faster information transfer to acquire higher quality.
Technological development can influence the company to increase its focus on
staff training, changes staff schedules to learn, and develop their skills in order
to adopt the new technology.

The company Beta should also consider the amount of investment into research
and development of its pharmaceutical products, as the costs of R&D are
increasing also it can be considered to be risky because the final results are
unknown. However, pharmaceutical’s production is based on high technology,
automatic production machines with different speed production levels and with
32 Results

integrated computer based system are helping production to be faster at lower


costs.

4.3.2 Micro-environment analysis


This analysis will be based on Porter’s five analysis of the following factors:

Threat of entry
Even though pharmaceutical industry is considered to be very profitable and
attractive to new entrants but very difficult to enter the market. Therefore, the
threat of new comers in this type of business is relatively low due to high
barriers. These barriers are mainly connected with the expenses of research and
development and marketing of the products that need to be distributed by
highly trained sales force which are considered to be the most influential factors
that leads the companies to succeed, other factors will be mentioned below.
 Scale and experience. Economies of scale are important in pharmaceutical
production as machines produce drugs in large volumes which give an
advantage over entrants in terms of production costs, also pharmaceutical’s
R&D costs are very expensive to invest in especially to new entrants besides
financial investments it requires experience as it highly contributes with
achieving better results.
 Differentiation. Due to the history and good reputation of the company, it
acquired customer’s loyalty as its products are differentiated from others.
Beta has more than 700 dosages strengths in various forms; it provides a
huge range of products according to customer’s needs. In 2010 Beta
launched 4 approved generic and 36 injectable. It is important to launch
new products with new compounds and dosages continuously, therefore it
is difficult for entrants to choose the right technology and strategy to
overcome this barrier.
 Capital requirements. It requires a large amount of financing needed to
acquire skilled staff, technology and assets to start in the pharmaceutical
industry, pharmaceuticals is considered to belong to the businesses that
require a very intense capital to be able to compete in the market.
 Regularity policy. There are many laws and regulations which are
internationally assigned by WHO, in connection to patenting, marketing
and drug testing, in order to protect drug innovation from being copied
illegally by competitors and to protect the consumers of the drugs.
Implementing these regularities is costly as they have to be followed
precisely and ethically.
Threat of substitutes
Generally speaking about the pharmaceutical products (medicines) substitutes
can be considered to be supplements in form of minerals and vitamins that help
the immune system, and alternative therapies (for example herbals, bio-
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substances, organs transplants, Chinese alternative therapy and others) but


these substitutes don’t threat or even entirely substitute the pharmaceutical
products as most of the health problems cases are treated by medicines.
However, it’s predicted that chemical generic products can be in the future
substituted by bio-generic products but this substitute is still in its early stage of
development.

Power of Buyers
The main customers are pharmacies, hospitals, distributors, whole sellers,
health organisation, and government agencies. It is very important for
pharmaceutical companies and Beta to satisfy and win their customer’s loyalty.

The company divided their customers into three categories according to their
locations:

 MENA region. Which represents Middle East and North Africa, it


contributed with 61% of revenues for 2010. Generic, Branded and
Injectable are sold to them.
 USA. 28% of Beta’s revenues are acquired from the U.S. market due to it’s
success in getting the approve form The FDA is now be able to sell some of
products to them. Currently sells generic products to them. Government
raised its health care expenditures which brought an increase of the total
rate of sales in the U.S. market
 Europe and other countries. This last category contributes with 11% as
mostly injectable products are sold to this category.
Most of the buyer’s seek for lower prices with relatively good quality. However,
buyers in this type of business are scattered and they as don’t wield much power
in the pricing. On the other hand, the government plays an important role
through NPPA (National Pharmaceutical Pricing Authority) in regulating
pricing.

Power of suppliers
In pharmaceutical industry there are few suppliers present on the market whose
threat can be considered to be medium to low. At the present Beta’s most
important suppliers considered to be around 25 different suppliers who are
related directly and indirectly to pharmaceutical industry.

One of the main suppliers for this industry is labour force; for this type of
business most of the staff members have a degree or an experience in pharmacy.
Therefore they can have a bargaining power over the industry as the industry is
mainly dependent on a narrow labour segment but their power is still relatively
in low rate.
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In addition to labour, other suppliers are those who provide raw materials such
as chemical organics, product packaging materials can include syringes for
injectable products, equipment needed for production and researches, and
technology. Other possible supplier can be biotechnology firms, they are more
known as partners rather than suppliers because biotechnology firms take the
risks and costs of clinical trials to provide formula compounds to them so that
Beta will manufacture and sell these products. This is done due to Beta’s
expertise in manufacturing and marketing which can enhance the product value
making it more profitable to co-operate together.

Due to economies of scale in production, the company is buying raw materials


in bulk which makes it easier to negotiate with prices. Also switching costs are
low as there are many suppliers present on the market but on the other hand
there is a risk of switching suppliers in case of raw materials because it has to
adjust with different raw material compositions which can affect drug’s
formulas.

Rivalry among existing competitors


There is an intense competition among competitors locally and worldwide with
low growth rate of the pharmaceutical industry. Competition is high especially
for the generic products, where are many companies trying to compete on the
market by developing new generic compounds by using new technologies at
attractive pricing. Furthermore, pharmaceutical companies not only compete
but also help each other by providing patent rights; it is done bolster company’s
R&D efforts and due to large profits gained from these patents. Therefore the
first who discovers a new drug or compound gets the patent rights.

According to the location and market share of Beta and its daughter companies
in the Middle East and North Africa, its main international competitors in terms
of sales are the market leaders in MENA, such as Sanofi-aventis, Pfizer, and
local competitors operating in Jordan such as Medipharma.

Sanofi-aventis operating in India and it is the world's fourth-largest drug


producer; their main strength that they focus on producing drugs for genetic
disorders treatment and they are the market leaders in vaccines. According to
IMS health the rate of their growth for 2009 were -2.6% in MENA as weakness
of this company recently the operating margin is declining sharply because of
the strong competition and rise of the expenses on R&D. Other reason is that
some national health authorities forced them to close their clinical trials due to
ethical concerns about the health of the volunteering patients in those clinicals.
Pfizer is an international company based in New York, this company is the
marketing leader in the world with high rate of cash flow that allows to have
large activates of R&D therefore Pfizer have the largest number of drugs patents
over the world. Weakness extensive and aggressive sales strategy which causing
Results 35

doctors and physicians to be pushed away from their products in addition to


that a new regulatory policy was introduced against aggressive marketing.
Another weakness is the decrease of growth and development of CNS and
cardiovascular products which are highly demanded in MENA.
Medipharma local Jordanian company mainly produces generic products.
Its strength in the rate of flexibility with products portfolio as they are focusing
on the local market and lower risk from loss in case of developing faulty
products. Weakness can contribute with paying for patents as their budget for
R&D is limited therefore less chance to come up with new products.

Beta is trying to become more known internationally but still its market share
and product portfolio is less in comparison with the international companies
that contribute with the worldwide market share. Locally Beta can be
considered to be one of the market leaders due to its continuous innovation.

4.3.3 Opportunities and threats identification


Opportunities
 Technology innovation can offer an improvement in the process of
production and lower its costs. They have to react quickly to the changes in
technology in order to get an advantage over competitors.
 Licensing agreements. These agreements define and protect the patent
rights of the inventor according to the WTO agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS). It brings such
opportunities for both the inventor and the drug company that markets the
product in form of profits and enhancement of product value. Beta’s
partnership with biotechnology firms is expected to grow as it can supply
drugs development pipeline. Beta can be the inventor for some of its
products that are developed in R&D so it can get the patents.
 Emerging markets and globalisation of new products which makes it
easier for them to market products to new regions especially through
spreading sales force into different countries and also by attending world
exhibitions.
 Increase of life expectancy brings an opportunity for them to increase
product portfolio and focus more on elder people; therefore there will be a
higher demand for drugs from that category which can bring higher profits.
 Growing on demand for non-communicable diseases this will help to
concentrate on developing new products that can cure non-infectious
diseases, bring an opportunity to gain profits from patents in case they
come up with new products faster than competitors.
 Increase of US government expenditures on Health care enables the
company to supply its generic products to USA intensively which can bring
an opportunity to supply other products and explore new acquisitions in
the future.
36 Results

 Increase of number of graduates can contribute to better performance at


Beta; skilled staff will have the tendency to absorb more complex tasks
which will help the company to achieve its goals faster.
Threats
 Appreciation of Dollar affects directly the Dinar as it’s connected to the
Dollar. This affects the rate of exports to be lower as the price of goods will
be higher, and vice versa for imports. Therefore appreciation of the Dollar
causes fewer revenues from sales.
 Recession and financial crises can threaten the companies to survive, as
they will be low in cash and can cause bankrupting. During crisis
investments rate are at their lowest therefore causing absence of financial
resources, slowdown of development and decrease of resources spent on
R&D and other in order to minimise any possible risks. These impacts
contribute to drop of GPD growth.
 Lack of educated women as working force brings a negative impact on the
working environment at work as the number of male is dominating which
can lead to discrimination, also this absent force could bring new ideas and
innovation to the industry.
 Strict Regulations by government law and international agreements. In
addition to that, Food and Drug Administration (FDA) approve products
prior to its sale, the process of new products launching is very slow due to
FDA’s strict regulations which can negatively affect the company in relation
to competition.
 Margin setup is done by government through NPPA (National
Pharmaceutical Pricing Authority) which can set up the profit margin for
the companies in order to prevent monopoly in this industry, therefore final
prices are controlled but it is equally set to all companies this can decline
profits and so decrease company spending on R&D.
 Competition in this industry is quite intense; Beta can be threatened by big
international companies such as Pfizer and Sanofi-aventis and others, these
companies have larger product portfolio and are able to innovate their
products faster than Beta due to their larger investments into their R&D
 Increase of interest in Biotechnology (biogeneric) as this field is developing
in fast rate, its cooperation with the biotechnology firms can be threatened
especially in relation to the chemical generic drugs, and therefore in the
future the market can shift to biogenerics and biotechnology firms be
independent on pharmaceuticals for manufacturing.
 Political instability in MENA region can be caused by public
demonstrations, civil war, and other certain events that can threaten
inhabitant’s life. This results with decrease in productivity and decrease of
international trade and trade within the countries in that region due to
transport barrier especially when the boarders are closed. Level of these
impacts depends on the degree of the instability. This is the current case of
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Libya where Beta has a daughter company, the boarders of the country
were closed therefore the facility was closed for a while but now it is open.
EFEMatrix
External Factors
Weight Reaction Score
Opportunities
Technology innovation 0.15 3 0.45
Licensing agreements 0.10 3 0.30
Increase of U.S. government expenditures on
0.06 2 0.12
Health care
Emerging markets and globalisation of new
0.05 3 0.15
products
Increase of life expectancy 0.04 1 0.04
Growing on demand for non-communicable
0.04 4 0.16
diseases
Increase of number of graduates 0.02 2 0.04
Threats
Competition 0.13 3 0.39
Strict regulations 0.10 4 0.40
Margins setup 0.07 2 0.14
Increase of interest in Biotechnology 0.06 3 0.18
Recession and financial crises 0.06 2 0.12
Political instability in MENA region 0.05 1 0.05
Appreciation of Dollar 0.04 1 0.04
Lack of educated women as working force 0.03 4 0.12
Total 1.00 x 2.70

Table. 4 EFE Matrix


Source: Schutta,2006. Data provided in the table are from my own work

The average weighted score is 2.5, Beta lies above the average with 2.70
indicating that the company is reacting well with the external factors especially
towards the most influential factors such as technology innovation, competition,
regulations and price control. Some of the threats that the company is not
reacting well towards political instability, appreciation of the Dollar. It should
react better towards the opportunity of increase of US expenditures on health
care.

4.4 Internal environment analysis

4.4.1 Organisational structure


The organisational structure of Beta in Jordan is hierarchical structure
described in general way, where the main functions of each unit are subscribed.
38 Results

It has very clarified organisational structure where each unit has specified
responsibility and managers to direct their departments. The disadvantage is
the communication among these units is difficult, as there is no effective
integrated communication system between the units which can make it easier
and faster for employees working in different departments to exchange
information

Board of directors
Govern and lead the company; they formulate, supervise and inspect procedures
and policies within the company. Contribute to major financial management in
relation to profits, as they decide about annual budgets. Attend meetings and
evaluate annual performance of Beta. Support company’s mission, promotion
and provide its needs. There are several units that are connected to the board of
directors and with each other such as:
 Internal inspection which involves control over the internal environment
with connection to employees, ethical and environmental responsibilities
 Strategic planning concentrates on formulating and informing employees
about any changes of strategies after have been selected and approved by
the board of directors
 Legal consultant to ensure that Beta operates legally in all aspects ensures
contracts with customers and suppliers to be fluffing legal terms and
conditions.
 Public relation and investor relation director with assistance of secretaries
who coordinate meetings, conferences, deal with public relations, and press
releases. Maintain the follow of information internally and externally and
maintain calendar scheduling of company’s activates.
There are main 5 departments directed to the managing director:
Sales and marketing department
This department has the following responsibilities:

 Sales consists of sales representatives who sell the products to customers


and are in direct contact with existing customers and try to get new
customers, also can provide customer service after selling the product.
 Marketing products by managing product promotions, future marketing
planning, designing products image and providing samples, cooperating
with public relations
 Market development aim is to search for new customers and collect
valuable information by doing market researches that can help to enter new
target segments, select marketing strategies to enter these groups,
furthermore can select which products which can be the best option to be
offered to these new targets, and co-operate with R&D.
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 Bidding, this is related only to governments orders, as the process of selling


products to governments is done by so called bidding. Government places
its request via websites or newspapers for particular products then
companies response to them by sending them their offers, best offer will
win the ‘bid’ and will proceed with the order.
Financial department
This department examines and analyses financial resources within the company
and conducts wages to employees and all sorts of payments including tax
obligations.
 Financial accounting provides accounts for reports which are intended for
public and shareholders, in form of quarter and yearly reports.
 Management accounting is concerned with provision of confidential
accounts for management of the company and budget planning for the
company.
Service management department
In this department there are two different units providing the following services
within the company:
 Human resources (personnel) deals with employees within the company
and provide them with services such as payrolls, training, motivation
programmes. HR Deals with recruitment of new employees, administrative
work and control employees to follow company’s policies and monitor
organisational culture. However, personnel also deal with staff
determination.
 Information technology associates are in charge of data entry, website
update and maintenance. Search and plan for new technology that can be
used within the company. Also support company’s internal systems.
Operations
 Production starts with production planning then realization of activities
connected with processing of raw materials into intermediates, other
processes with addition of active ingredients, formulation and packaging.
Furthermore, controlling and maintaining processing requirements.
 R&D team mainly work in separate laboratories; try to develop new in
licensed products, enhancement of existing products. Do application
researches to provide alternatives of applying and using existing chemicals.
 Quality control has many responsibilities such as monitoring speed and
quality during the process of production.
 Input materials are identified and checked and intermediate materials are
controlled to have the right specifications in order to proceed with
production of final products which will be tested in the labs to ensure
40 Results

desired quality been achieved. Final step is to write a report with approval
that products are qualified to be sent to the store.
 Maintenance of equipment used in production process. Help with repairing
of machines when faulty.

Procurement department
 API sourcing analysing and finding cost effective suppliers who provides
good quality of active ingredients needed in the production process.
 Purchasing dealing with suppliers, long-term planning of required supplies
and purchasing of daily basis needs for the company.
 Stores stock control movement and storage of input materials. Final
products are kept in regulated and controlled conditions, to maintain
products safe till expedition date.
 Logistics deals with company’s distributors, choosing effective distributors.
Determine and evaluate transportation systems, deal with transporters,
delivery time and transports costs.
Results 41

Figure. 4 Organisational structure


Source: own work based on data provided by the company

4.4.2 Marketing mix


Consist of following four controllable elements known as the four P’s:

Product
Products are sold to customers in relation to the therapeutic categories:
42 Results

Number of
Category Description
products
Described against infectious diseases i.e
Anti-Infectives virus ,bacterial, fungi and protozoa (ex. 167
Penicillins)
Focus on psychiatric, neurological and
Central Nervous pain management, i.e
57
System (CNS) migarine,alzheimer, depression, narcotic
(ex. Ibuprofen)
Cardiovascular and Connected to heart diseases and blood
59
Diabetes vessels. i.e stroke, coronary heart disease
Described against respiratory diseases i.e
Respiratory System 40
tuberculosis, asthma, lung cancer
Gastroenterology Related to nutrition, digestion process
52
and Metabolism and obesity (ex. Ranitidine)
Concerns gynecology, andrology and
Genitourinary
diseases occur in urinary and genital 3
System
organs
Oncology Cancer treatment 33
Providing patients who got an organ
Transplantation transplant with immunosuppressive 1
agent
To treat hormonal diseases and disorders
Hormones 7
i.e growth hormone, steroid hormone
Described for skin diseases including all
Dermatology 28
types of skin infections
Described to treat pain sensation
Anesthetics 13
including muscle relaxants
To treat connected disorders of muscles,
Muscoloskeletal
nerves, joints, bone, and conditions of 54
System
Osteoporosis
Used to treat for allergies, contain agents
Anti-Histamines to release histamine in the body against 22
allergic reactions

Table. 5 Product description and number of offered products


Source: own work based on data provided by the company. Note: number of products is
calculated without separation of dosage strengths

Beta divided these categories into three main sectors which are internally
recognised in the company and according to these sectors the company
calculates their yearly share of revenues. The main categories are:
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 Branded products are range of branded-generic products which Beta got


the permission to produce it but the product is still under patents rights,
and in-licensed products which sells it to other companies under patent
rights.
 Generic products. Some of Beta’s products are under-licensed which means
that the original product belongs to different company but its patent rights
are expired therefore Bet produces it with different brand name. Generic
products are oral; in capsules, tablets forms.
 Injectable mainly products that are in liquid format, these products are
injected into the human body for treatments such as vaccines. They
expertise in anti-infective to be injectable.

graph. 4 Revenues by segment for 2010


Source: own work based on data provided by the company

Price
They use a formula to calculate the final price for the customers. This formula is
based on the mark-up percentage which is determined by the decision of the
company’s management and the product costs. The mark-up percentage is
subtracted from 100% so that the cost price is divided by the remaining
percentage therefore giving the selling price to the customer. The remaining
percentage includes the net profit, with all forms of costs spent on the product
such as operational costs, patents costs, discounts, transportation, insurance
and labour costs.
Depending on the quantity ordered and the strength of dosage of the drug, the
final prices differ. Customers can negotiate with Beta with regards to discounts
percentage on quantity ordered, usually offers around 10% off as a quantitive
discount but percentage variation mainly depends on negotiation.
Orders are delivered to the customer usually on the quantity ordered, raw
material availability and on the length of transportation to the customer. The
44 Results

transportation is provided to the customer paid by Beta. In cases where


customer has its own transporter then the price of transportation is deducted
from the original final price.
The invoice is usually with 60 days of maturity or 120 days for compaines in
MENA. There are two payment methods, most used one is the letter of credit
(LC) for the invoice and other method is by cash. It doesn’t offer a discount of in
case of paying by cash to encourage the customer to pay faster.
Place
Has only one main kind of distribution which is direct distribution to the
customers. Customer places an order via email, fax, or telephone or personally
with sales and marketing representatives. Order forum must include name of
product, number of packages of the wanted product, dosage strength and
expected delivery date. Production is done only according to orders, doesn’t
produce extra to be stored in the stocks. Therefore products are delivered
directly from the production to customers, Beta either transports the goods by
its own transporter or customer takes the goods directly from the stocks.
Due to presence of daughter companies of Beta in 3 different countries makes it
easier to deliver the products to customer from different regions which help the
company to reduce the pressure of production in one location and deliver the
products faster.

Promotion
They try to combine personal selling with public relations. It has an extensive
sales and marketing capabilities. One of the largest teams in the company
consists of sales and marketing representatives as their main way to promote
products through personal selling. The compnay believes in establishing better
relationship with its customers through this way of promotion as
representatives visit their customers and potential customers working in
pharmacies, hospitals, physician centres and other groups to provide them with
necessary information, catalogues, and products samples.
In many occasions Beta’s representatives attend various exhibitions,
conferences, events and seminars around the world. In addition to press
releases, it publishes quarterly financial reports, annual information updates
and presentations to inform about performances level, and yearly aims of the
company. All these information about the company and products are provided
on the website where details are clearly stated to viewers in a user friendly form.
Beta organises yearly events and seminars to raise awareness against cancer and
diabetes among employees and public, also distribute brochure campaigns to
inform about causes and dangers of these diseases.
Results 45

4.4.3 Human resources


Staff members are the greatest assets and one of the main important factors that
can lead the company to succeed. Provision of equal opportunities to all
employees and applicants for employment, it does not differentiate in religion,
race or nationality when hiring.
Qualified and skilled staff is the main contributor of achieving goals and better
quality of products therefore they must be provided with favourable working
conditions and benefits to motive them at work.
Beta pays its employees a fixed monthly wage; they also can get bonuses or
promotions depending on the performance level of each individual regardless to
their position at work, as reports are given every 3 months are evaluated by
manager department. As extra benefits they currently provide employees with
price discounts of 7% on products sold in local pharmacies, this percentage can
differ from year to year.
Continuous training of current employees and newcomers in training
institutions either within the company or outside it on Beta’s expenses. HR
department gives the possibility for employees to shift positions among the
daughter companies which make it attractive for them in case they want to shift
to one of the countries where it operates.

4.4.4 Strengths and weaknesses indentification


Strengths
 Wide product portfolio as the company currently offers more than 360
products in different dosages strengths and forms.
 Intensive promotion helps to achieve higher sales rate by attracting
potential customers and creates awareness of the products especially
through personal selling as Beta’s representatives communicate directly
with customers to interact with buyers and to build up a better relationship.
 Highly skilled employees provide professionalism to produce products with
high quality with the help of their experience at this field increasing it’s
level of know how, In addition to production process, qualified sales and
marketing representatives with high level of flexibility play an important
role to reach goals in effective way.
 Acquisitions in 3 different countries under Beta’s name insure the company
to produce more products as the orders are spread to more than one
manufacture therefore helping in reduction of production costs, faster
deliveries and more flexibility to select manufacturing strategy. This all will
contribute to achieve better recognition of it in more countries.
 Size of facilities, they own its all facilities doesn’t rent. The facilities are new
and their size is big. Most of these facilities are occupied but there is still
available capacity which can be used as new production areas.
46 Results

 Good reputation and relations over the past years Beta kept good relations
towards its customers and suppliers by fulfilling its contracts, terms of
payments and ethical responsibilities.
 Rewarding employees program is done every 3 months by provision of
monetary bonuses and non-monetary rewards, further more giving
opportunities to shift to higher positions at work. A motivation program
was introduced recently to help in motivating employees in order to
increase their efficiency, productivity, feel of recognition and belonging at
work place.

Weaknesses
 Lack of communication between departments in relation to the size of the
company and diverse locations of it daughter companies the
communication is more complex and doesn’t have an effective system of
communication which can help in easier and direct connection between
departments within Beta and its daughter companies in relation to
knowledge and orders processing.
 Inefficient disturbers recently there are problems with some of distributors
as they are intermediates between Beta and customers who in many cases
delivered products that are faulty packaged, bringing a bad image for the
company and causing problems with their distributors.
 Lack of maintenance staff or unavailable spare parts due to lack of skilled
people who work at field of machines maintenance; it consumes time to fix
any problems that can occur especially during production of an urgent
order. Furthermore, some spare parts of machines are unavailable at the
market which forces them to contact original supplier for spares which can
be more costly to buy and timely consuming to deliver these missing parts
which can affect production process.
 Very low number of in-licensed products in comparison to world-wide
competitors, Beta does not invest much in R&D to develop new in-licensed
products and also doesn’t have much experience like other competitors to
develop new drugs at fast rate.
 Presence of slow production due to older production technologies, only in
some of it’s facilities have older type of technology used for production
which can decrease the production rate, therefore increasing costs
Results 47

IFE Matrix
Internal Factors
Weight Reaction Score
Strengths
Highly skilled employees 0.15 3 0.45
Intensive promotion 0.13 4 0.52
Wide product portfolio 0.10 3 0.30
Acquisitions 0.08 2 0.16
Size of facilities 0.07 1 0.07
Rewarding employees program 0.06 3 0.18
Good reputation and relations 0.03 2 0.06
Weaknesses
Presence of slow production due to older type
0.12 3 0.36
production technologies in some facilities
Very low number of in-licensed products 0.09 2 0.18
Inefficient disturbers 0.07 2 0.14
Lack of maintenance staff or unavailable spare
0.06 1 0.06
parts
Lack of communication between departments 0.04 2 0.08
Total 1.00 x 2.56

Table. 6 IFE Matrix


Source: Schutta,2006. Data provided in the table are from my own work

The total weight score is 2.56 that just almost lay on the average of 2.50 which
means that the company reacts well but still has to improve more in with all in-
fluences. The most contributing factors of the result are skilled employees, in-
tensive promotion, wider product portfolio and presence of older type of ma-
chines in some facilities.

4.5 Strategy selection and formulation


Based on mentioned strategies in the theoretical part will be implemented in
this section.
Based on the results of EFE matrix and IFE matrix, company reacts less towards
internal environment than the external. The intersection position of these two
results belongs to hold and maintain strategy which indicates that Beta should
implement strategies that focus on product development and market
penetration. Therefore I do approve the hypothesis that Beta should enlarge its
product portfolio, however it also should improve in several aspects which will
be mentioned in the SWOT analysis.
48 Results

Figure. 5 IE matrix
Source: Žufan, 2005, results of the matrix is my own work

Kotler’s strategy
According to Kotler’s strategies Beta is applying two different strategies when
comparing to MENA market and the international market. In relation to the
international market the compnay is considered to be a follower as the market
share in world-wide is still very low and follows market leaders, like other
followers produces large number of generic products which have expired patent
rights. Furthermore, it didn’t launch large number of in-licensed products that
can challenge and compete with the market leaders. On the other hand, due to
lack to highly developed companies in the MENA region, Beta is considered to
be one of the market leaders, as its market share in MENA among 10 best
sellers.
Porter’s strategy
Beta strategy of focus strategy but uses both combinations of cost and
differentiation in it.
They use cost strategy and focus strategy simultaneously. This is done by
implementing of focused low cost strategy in relation to production of products
belonging to the generic segment as they are a favourable option to price
sensitive customers who rather buy less expensive and similar to original
branded products. Beta sells generic products majorly to the U.S. market.
Results 49

Products can be differentiated from other competitors by usage of differentiated


compounds and/or active ingredients which plays an important role in
connection with the quality of final products which can be noticed by the
effectiveness of the treatments, in relation to the dosage strength of the product.

SWOT analysis

S-O strategy
1. Find new markets
Beta provides high quality of various products that gave the company a
good reputation over the years; as a result of emerging markets and
globalisation it can take an advantage of it to penetrate new markets
through its direct relations with potential customer and also by finding
new distributors who can provide products to more regions around the
world.
2. Capitalize facilities
Capitalizing with new machines and technologies due to available
capacity of facilities can bring an advantage to the company to enlarge its
product portfolio and can also gives a potential to develop new product
pipelines related to non-communicable diseases as the interest of
providing treatments to these diseases is growing.
3. Penetrate the U.S market with other branded and injectable products
The U.S. government is increasing its expenditures in the health care
which can motivate Beta to sell more generic products and offer its
branded and injectable products by taking an advantage of its well
promtion strategy. However, the USA market is big so as future plans
Beta can make acquisitions there, as it will help the company to grow and
decrease its costs while producing and marketing within the country.
4. Increase number of branded-generic products
Increase of interest of licensing agreements that are related with
branded-generic products enables them to bring more profits by these
agreements and also encourage launching new products with the help of
its highly skilled employees to produce and market more number of
products effectively.
S-T strategy
1. Improve competitive advantage
Beta can overcome and reduce the threat of competition as currently it
has a wide number of products, therefore by taking the advantage of its
reputation and effective promotion through personal selling; Beta can
build flexible production according to its customer’s needs.
50 Results

2. Increase women force in the company


No discrimination of women while hiring, offer them attractive benefits
to encourage them to work, also provide them with good training by Be-
ta’s highly skilled employees in order to provide them with necessary
knowledge needed for them at work. Getting the experience of this skilled
staff can interest more women to work in it and they can contribute to
give better results at work.
3. Investing into API sourcing team to lower costs through finding efficient
suppliers that provide good quality at lesser price
Usage of their skilled team can be valuable when selecting a good quality
of active ingredients which will reflect on the effectiveness of the
medicine and increase the medicine’s life. Hiring qualified people who
immigrate to Jordan due political instability in their countries in MENA
region can be a plus for the management to acquire more skilled staff and
introduce a better mix of culture within the company. Finding a good
quality of active ingredients at lower price reduces the impact crises by
lowering costs of the company.
W-T strategy

1. Seeking for more co-operation with biotechnological firms to increase


number of in-licensed products
Due to Beta’s good reputation in the market, it should keep and build
more relationships with various biotechnological firms in order to license
new formulas so that it can produce these new products. In case of
increase of threat of Bio-generic products in the future the company can
merge with a biotechnological firm or contract with them to license these
products
2. Invest more into on R&D researches
They should involve and benefit from the qualified staff in relation to
researches done in R&D by finding information about changing needs of
customers to help the company to launch new branded products which
give an advantage of differentiating its products from other competitors.
3. Finding efficient distributors
Searching for distributors who have regulated storing methods so that
the quality of medicines will stay on the same high level that Beta
produced in order to reduce the competiotn threat by provding customers
and consumers with good quality medicines

W-O strategy
1. Implement newer technologies to increase quality and mass production
Results 51

Because of continuous technology innovation, implementation of these


new technologies in the facilities where its needed will improve the
production quality and quantity of the products therefore lowering the
costs of the production and improving its standards.
2. Improving communication system within the company
By applying new methods and systems of communication within the
company, its daughter companies in order to easily access to data bases
and necessary information that will contribute to process licensing
agreements faster and be more transparent.
3. Hire more people in the maintenance staff
The company should take the advantage of increase of qualified
graduates to cover the gap of low number of maintenance staff in order to
avoid any problems that can stop production while processing customers’
orders.

The following matrix shows the summary of the SWOT analysis:


52 Results

Strengths Weaknesses
Internal Highly skilled employees Presence of slow production
environment Intensive promotion due older production
technologies in some facilities
Wide product portfolio
Very low number of in-
Acquisitions
licensed products
Size of facilities
Inefficient disturbers
Rewarding employees
External Lack of maintenance staff or
program
environment unavailable spare parts
Good reputation and relations
Lack of communication
between departments
Opportunities S-O strategy W-O strategy
Technology innovation  Find new markets  Implement newer
Licensing agreements (S2,S3,S7,O4) technologies to increase
Increase of U.S. government  Capitalize facilities quality and mass
expenditures on Health care (S5,O1,O4,O5) production (W1,O1)
 Penetrate the U.S.  Improving
Emerging markets and
market with other communication system
globalisation of new products
branded and injectable within the company
Increase of life expectancy (W4,O2,O4)
products (S2,S3,O3)
Growing on demand for non-  Hire more people in the
 Increase number of
communicable diseases maintenance staff
branded-generic
Increase of number of products (S1,O2) (W4,O5)
graduates
Threats S-T strategy W-T strategy
Competition  Improve competitive  Seeking for more co-
Strict regulations advantage operation with
Margins setup (S2,S3,S4,S7,T1) biotechnological firms
 Increase women force to increase number of
Increase of interest in in-licensed products
in the company
Biotechnology
(S1,S7,T7) (W2,T4,T1)
Recession and financial crises  Invest more into on
 Invest into API team to
Political instability in MENA Lower costs by finding R&D researches
region efficient suppliers that (W2,T1,T3)
Appreciation of Dollar provide good quality at  Finding efficient
Lack of educated women as lesser price (S1, T5,T6) distributors (W3,T1)
working force

Table. 7 SWOT matrix


Source: Schutta,2006. Information provided in the table is from my own work
Results 53

Strategy calculation for US market

Cash Flow projection based on innovation in $000
Year1 Year2 Year 3 Year 4

Opening cash balance             1,096.85              4,044.16             2,385.49

Operating Activities 
Cash paid by customers          10,155.86           12,187.04            12,694.83          12,897.95
Sales and marketing costs            3,698.99             3,735.98              3,885.41             4,040.83
General and administrative costs                900.98                 928.01                  955.85                994.08
Cash paid for employees            3,890.00             4,006.70              4,086.83             4,209.44
Other operating expenses                569.05                 569.05                  540.59                546.00
Net cash flow from operating activities 1,096.85 4,044.16 7,270.29             5,493.09

Investing Activities
Purchase of property, plant and Equipment                       ‐                       ‐              4,539.12             1,815.65
purchase on intangible assets                       ‐                       ‐                  345.68                       ‐
Net cash flow from Investing activities                       ‐                       ‐              4,884.80             1,815.65

Total Cash flow            1,096.85 4,044.16              2,385.49             3,677.44

Year0 Year1 Year2 Year3 Year4


                                                                    (9,059.01)            1,096.85 4,044.16              2,385.49             3,677.44

IRR 16%

Figure. 6 Cash flow projection of introducing branded and injectable products to U.S. market
Source: own work

A simple cash flow statement is done after analysing the U.S. market of expected
costs and revenues when introducing branded and injectable products. As the
expenditures increased on the health care, I expected of around 10% share of
these two types of products to mark up from total US sales, therefore giving an
estimate of around 10M dollars as cash paid by customer which gradually will
increase by 27% by the end of the fourth year. Costs are mainly connected in the
first two years of marketing and selling these products intensively with starting
amount of more than 3.6 M dollars. This expense will be steady of 4% increase
in third and fourth year. At the start it is estimated of having 100 people
operating on it, however these employed staff will have college degrees therefore
the minimum expected wages of around $ 37000 and bachelors can receive of
US $ 50000, these estimates are based on the statistical results of wages US
full-time workers above 25 years old.
The investment activities are considered as future plans after the company
starts to achieve better cash flow results, this strategy can bring an opportunity
54 Results

to the company to grow further in this market by purchasing of new property,


facilities to produce Beta’s products there and to be more sustainable in
competition within the market. An estimation of amount of investment which
can be taken through selling these products into new property and provision of
equipment is about four and half million dollars because of the high technology
used in this industry and the increase prices of acquisition of land properties
lead to estimation of higher investments. This investment will continue of only
40% of the original investment cost in the third year because it is meant for
buying new machines and technologies for production. Intangible assets for
providing better information system within the company are also considered in
this cash flow.

IRR is calculated as the final part of this strategy, to provide a better view on the
rate of return on this investment, as it is shown the result is 16% which is not
quite high due to introduction of early further investment into property and
purchasing of intangible assets but on the other hand, we can consider it to be
profitable as the company already is selling its generic products and by
introducing these other types it can bring better results in future.

This is an alternative way of calculation based on direct simple method of cash


flow calculation, due to lack of detailed information about the exact costs and
other investing costs, the results are predictions for the mentioned conditions
which were specified in the cash flow statement. However, there are many other
ways which can be used to predict the effect of implementing this strategy which
the management can consider to use.
Discussion 55

5 Discussion
When analysing the characteristics and the strategy aimed by the company, it
can be noticed that the management is on the right track to achieve expected
aims while comparing it to the results of the internal and external analysis of
Beta. The main strengths of the company should be emphasized as it has
developed a good reputation over the years of high quality and wide range of
offered products. However, there are weakness which should be eliminated such
as rate of production in some facilities and lack of developing in-licensed prod-
ucts when compared to international competitors.

Based on these results of the external environment analysis, the pharmaceutical


industry is very competitive; therefore the management should keep on
investing more into R&D so that it can launch more in-licensed products which
bring more profits to the company, and into API sourcing to help with the
improvement of medicine’s effectiveness and the quality, in order to be
differentiated from others to win potential customers and develop new markets
in the long-run.

Furthermore, regarding to the internal analysis they should concentrate on


maintaining the training of the workforce and renewing the old machines in
some of its facilities to newer technologies, this will help the production to be
faster. In addition to technology, the company should improve its
communication system to get accurate results to accelerate the process of
regulations, agreements and licensing.

According to the analysis of the current situation and SWOT analysis of Beta, it
shows that the company is doing well based on the total scores of EFE 2.70
matrix and IFE matrix of 2.56 which belongs to hold and maintain strategy;
however the management can focus more on increasing their product portfolio
to increase the company’s market share. Also they should penetrate the U.S.
market with injectable and branded products as they already sell generic
products which make it easier to market their other products with their existing
customers in that country. Other strategies which contribute to achieving better
results are finding efficient distributors, rewarding employees, capitalizing free
space in facilities and further acquisitions in the future.

I think that these main suggested strategies can help Beta to grow and be more
successful on the market. By implementing and continuous control of
mentioned strategies, the management can review the effectiveness of them or
make changes and improvements of these strategies. However, there are many
tools and other alternative strategies that can be analysed by the management of
the company but due to thesis limit, all these tools and strategies cannot be
mentioned and used in it.
56 Conclusion

6 Conclusion
Every management should predict and observe the changing environment in
order to formulate and adjust their strategies according to these changes. Fast
Implementation and continuous controlling are important for the company to
be able to compete better within its industry market.

The aim of this thesis is to elaborate on the current situation of pharmaceutical


company. The theoretical part was mainly focused on the strategic management
and its process. Based on the studied literature the practical part was applied
from this gained knowledge and from the results of the external environment
analysis, internal environment analysis including IE matrix and SWOT analysis.
I suggested and formulated possible strategies and improvements that can help
the management. According to Porter’s alternative strategies, Beta should keep
the focus strategy with combination of cost and differentiation.

Furthermore, discussed hypothesis of increasing the product portfolio which is


considered by the management can be approved according to the analysis done
which indicates that it is possible to consider this strategy and implement it.
Other key factor strategy which can be developed immediately by the company
is penetrating the U.S. market with injectable and branded products to increase
its market share. Calculation of it is done to provide more information about
this strategy.

Due to the limited frame of this bachelor thesis, was not available to elaborate
more on all possible strategies and tools into details. Therefore implementation
and control of these strategies are not included into this thesis. I hope my elabo-
ration will have a value to the management of the company and it is realistic for
them to apply it.
References 57

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Appendixes 59

8 Appendixes
<15 yr 15-64 yr 65+
Year
percentage percentage percentage
2005 37.32 62.7 3.2
2006 37.32 62.7 3.2
2007 37.32 62.7 3.2
2008 37.30 59.5 3.2
2009 37.30 59.5 3.2
2010 35.30 59.9 4.8
Table. 8 Size of population according to age structure.
Source: own work 2011 based on data from Jordan statistics

Population
Year inhabitants growth
rate (%)
2005 5473000 2.3
2006 5600000 2.3
2007 5723000 2.2
2008 5850000 2.2
2009 5980000 2.2
2010 6113000 2.2
Table. 9 Number of inhabitants and population growth rate.
Source: own work 2011 based on data from Jordan statistics

Educational
Employed Inactive Unemployed
level
Less than
3.4 95.2 27.7
secondary
Secondary 6.1 92.1 22.8
Intermediate
27.0 64.2 24.5
diploma
Bachelor’s
degree and 48.6 34.2 26.2
above
Total (%) 11.2 85.0 25.4
Table. 10 Status of the labour market of women aged 15+ and educational level for year 2008
Source: own work 2011 based on data from Europa, Note: Figures do not add in rows or in
columns

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