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The international pharmaceutical industry is highly regulated. National regulatory authorities administer a panoply of laws and regulations governing the testing, approval, manufacturing, labelling and marketing of drugs and also review the safety and effectiveness of pharmaceutical products. These regulatory requirements are a major factor in determining whether a substance can be developed into a marketable product and the amount of time and expense associated with such development. SK&F is a pharmaceutical company and they are manufacturing a wide rang of drugs which are available in the form of syrups, tablets and capsules. As the company produces ethical products therefore their market is spread all over Pakistan and the activities of company depend upon the population the respective zone.
1.1 COMPETITION:
Company faces intensive competitions form other pharmaceutical companies their main competitors are Abbott, Sandoz, and Merck.
2 GLAXO SMITHKLINE:
2.1 INTRODUCTION:
GlaxoSmithKline (GSK) is a world leading research-based pharmaceutical company with a powerful combination of skills and resources that provides a platform for delivering strong growth in today's rapidly changing healthcare environment. GSK's mission is To improve the quality of human life by enabling people to do more, feel better and live longer. Headquartered in the UK and with operations based in the US, the new company is one of the industry leaders, with an estimated seven per cent of the world's pharmaceutical market. GSK also has leadership in four major therapeutic areas - anti-infectives, central nervous system (CNS), respiratory and gastro-intestinal/metabolic. In addition, it is a leader in the important area of vaccines and has a growing portfolio of oncology products. The company also has a Consumer Healthcare portfolio comprising over-the-counter (OTC) medicines, oral care products and nutritional healthcare drinks, all of which are among the market leaders. Based on 2000 Annual Results, GSK had sales of 18.1 billion ($27.5 billion) and profit before tax of 5 billion ($8.1 billion). Pharmaceutical sales accounted for 15.4 billion ($23.5 billion), 85 per cent of the total. GSK had four products with sales of over $1 billion and a total of 16 products with sales in excess of $500 million. GSK has over 100,000 employees worldwide. Of these, over 40,000 are in sales and marketing, the largest sales force in the industry. Almost 40,000 employees work at 108 manufacturing sites in 41 countries and over 16,000 are in R&D.
Primary business activity in Pakistan consists of manufacturing and marketing both pharmaceutical and consumer products. All the consumer products are manufactured at Landhi Plant, which was previously, belongs to SmithKline Beecham.
In SK&F all the departments plan and work according to their objective, defined by head of department. To make sure the activities are in coordination with the plan further assistance is provided to the managers. 2.4.5 ACHIEVING BUSINESS OBJECTIVES: Managers at SK&F follow the technique or strategy of Simply better to relate and achieve their short term and long term goals. They use the 10>3/1 planning process to set their direction. They define this process as, Our three year Requirements are incremental that keep us on target toward those long range goals; and our one year plan set objective and measure s that ensure us focus stay on meeting the three year Requirements.
4 ABOUT PRODUCTS:
Glaxo SmithKline is producing hundreds of products both pharmaceutical and consumer. But in Pakistan they manufacture limited number of products. Some of them are being discussed below.
PRODUCTS:
PHARMACEUTICAL CONSUMER
TAGMAT FIEOVXIT FIFOL IODEX CHEWCAL FURICINE CREAM FURIXION SUSPENSION PANADOL TRITANRIX VACCINES VALTREX ZOVIRAX POLYFAX
Within commercial division there are several departments, and most of them have line authority . on the other hand technical division is separated, and it has its own departments , heads of these departments report to more than one individuals. Finance and Administrative Human Resource Quality Assurance Production Medical Services Marketing & Sales Legal Information resource
Marketing and Sales is controlled by single individual In SK&F, all the activities related to Management Information are headed by Director Finance and administrative division. NOTE: Please refer to the appendix section for organization structure.
6.5.1 OVER ALL COST LEADERSHIP STRATEGY (OLC): Over all cost leadership strategy can be pronounce as a most popular (general) strategy, as almost every company follow this strategy. The basic concept behind this strategy is to reduce cost of production in such a way that over all production quality does not effect negatively. This strategy can be applied to an organization with close attention
to production method, overheads, marginal customers and over all cost minimization in different functions. SK&F do implement this strategy in its various functions; especially this strategy is implemented to in production department. All the departments strive to spend their time and efforts on those activities that add value to the customers. Necessary measures are taken to eliminate steps that waste time, money, and energy. 6.5.2 FOCUS AND DIFFERENTIATION STRATEGY: SK&F is engage in producing ethical products, and are Striving to make lives better that is why they do not exercise focus and differentiation strategy.
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Knowing the consequences SK&F is following the strategy of adopting latest computer system for all their function. Now the company is using the same versions of softwares in Pakistan as it using in U.K and other European countries. With the changing softwares the need of training and development of user, to make them familiar and ensure the effective utilization of systems rises. The (I R) Information Resource department arranges both internal and external training for different user regarding their functional use of system. This training may be requested by the user himself or I R manager.
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8 OPERATION (DEPT):
IN
MARKETING
AND
SALES
8.1.1 AGE: Vitamins are targeted toward people in the age brackets of 50 to 65 years. These vitamins include Revital-M, Revital-B and Chewcal. Revital-B is also being targeted toward children age 6 to 11 year. 8.1.2 GENDER: Fifolvit and Fifol are being targeted toward women age 25 to 45. Zental suspension is also being targeted toward children of age brackets from 1year to11year.
8.2 DISTRIBUTION:
The company is targeting its customers by using different distributors to ensure the availability of its products all over the country, for this purpose the company has divide Pakistan into three zones (South, Central, North), in order to exercise proper control. For every zone, one or more than one distributor has been employed.
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The function links the consumer, customer, and public to the marketer through information. This information is further used to identify and define marketing opportunities and problems; to generate, refine, and evaluate marketing action; and to improve understanding of the marketing process. At SK&F, managers are well aware of this fact and substantial consideration is given to market research, but there exist no separate department for marketing research. Marketing research manager reports to Marketing services manager, operates as a part of Marketing Division. SK&Fs marketing research process can be divided into three steps. Defining problem and research objective. Collection of information for the development of research plan. Interpretation of data.
8.8 PRICING:
In Pakistan pharmaceutical pricing is controlled by the government, therefore company can not set its prices at its own. Because of that and as a consequence of increasing input cost of production profit margin per unit is shrinking day by day.
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10 CHANGE:
10.1 LEADING CHANGE:
Major change took place is integration of SmithKline with GlaxoWellcome. This decision was taken in January 2000. Ideologically both the companies have integrated, but in practical, integration process is in pipeline.
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Both the companies were pharmaceutical giant of the world and in pharma industry, role of research and development is very important here, existence of a company widely depend on new developments. So, it was believed that they can perform better and use the ideas, experiences of each other if they merge. At the same time research and development requires large resources so with large resources of new company i.e, GlaxoSmithKline, they would be able to spent more on research and development. 10.3.2 COST SYNERGY:
Cost synergy is another benefit that attracted the top-level management of the GlaxoSmithKline to get integrated. Cost synergy will be achieve with the merging to different types of resources available for example with the integration of human resource company will be able to save lot of money. Similarly in case of production and other department company will save large financial resources. 10.3.3 ECONOMIES OF SCALE:
GlaxoSmithKline will be able to achieve economies of scale as it would be able to produce in large scale. It will reduce raw material cost and other overheads. 10.3.4 COMPETITIVE POSITION OF THE COMPANY:
In the past SmithKline and GlaxoWellcome was to rivalries, so after the integration they will be performing together and will be able to meet competition from other companies in better way.
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11 PERSONAL EVALUATION:
Over all change is positive for both the companies. Change was very much preplanned and executed accordingly. Change in the mission statement will not effect daily practices in the organization in short run but it will have deep impact on the long run. Overall business strategy of the company has changed. It has sold out some of its products which were not performing well. Company will have to face more legal problems, more careful decision making is required in introducing new drugs, because small mistake can bring too many problems for the organization. This merger can create problem for the company since both SmithKline and GlaxoWellcome had differing cultures. It would be difficult and time consuming to have single culture in Glaxo SmithKline. Change in organization structure in one of the biggest change that has occur in the organization. Presently, appointments at the topmost level have made and it is appear to me that the new organization will have structure, which would resemble matrix type of structure. Difficulties can arise in line of authority and responsibility distribution. Power struggle to get better position can start and it can work as de -motivational force. Company has acquired good financial position. Now it is able to spend more on research and development. This will ensure long-term success of the organization. Merger has made company more powerful in its competition with other companies but this can backfire in regions like USA and European Union where monopoly control laws are very demanding. Change is process of operations is another big change with is in the process of pipeline. This change is costly and time consuming. To properly implement this change company will have to send lots of money on training and development of the employees.
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CONTENTS
I II III IV
1 INDUSTRY OVERVIEW:...............................................................................................1 1.1 COMPETITION:.......................................................................................................1 1.2 TREND IN THE ECONOMY:..................................................................................1 1.3 GOVERNMENTS POLICIES:................................................................................1 2 GLAXO SMITHKLINE:..................................................................................................2 2.1 INTRODUCTION:....................................................................................................2 2.2 GSK IN TIME:..........................................................................................................2 2.3 GSK in Pakistan:........................................................................................................2 2.4 INTRODUCTION TO Smith Kline & French (SK&F).........................................3 2.5 CORE VALUES:.......................................................................................................4 3 CORPORATE OBJECTIVE FOR THE YEAR 2001:.....................................................5 3.1 MARKETING AND SELLING OBJECTIVES FOR THE YEAR 2001:................5 3.2 RESULTS OF CORPORATE OBJECTIVES DURING THE YEAR 2000:...........5 4 ABOUT PRODUCTS:......................................................................................................6 5 BASIS OF ORGANIZATIONAL STRUCTURE:...........................................................7 6 POLICIES AND PROCEDURES:...................................................................................8 6.1 WORKING CAPITAL:.............................................................................................8 6.2 WORK FORCE: ......................................................................................................8 6.3 CAPITAL STRUCTURE:.........................................................................................8 6.4 DIVIDEND POLICY:...............................................................................................8 6.5 BUSINESS STRATEGY:..........................................................................................8 6.6 SUPPLY SYSTEM:...................................................................................................9 6.7 MALIGNANCE OF FACILITIES AND EQUIPMENT:.........................................9 6.8 INVENTORY CONTROL:.......................................................................................9 6.9 PREVENTING MAINTENANCE:.........................................................................10 6.10 PRODUCTION PLAN Vs ACHIEVEMENTS: .................................................10 6.11 TECHNOLOGICAL COMPETENCE:.................................................................10 7 USE OF MIS FOR DECISION MAKING:....................................................................11 7.1 SECURITY MEASURE FOR INFORMATION SYSTEM:..................................11 7.2 DATA ENTRY INTO INFORMATION SYSTEM:...............................................11 7.3 IMPROVEMENT AND TRAINING:.....................................................................11 8 OPERATION IN MARKETING AND SALES (DEPT):..............................................13
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8.1 MARKET SEGMENTATION:...............................................................................13 8.2 DISTRIBUTION:....................................................................................................13 8.3 MARKET SHARE:.................................................................................................13 8.4 MARKET RESEARCH:..........................................................................................13 8.5 SALES ORGANIZATION:.....................................................................................14 8.6 TRAINING PROGRAM FOR SALES FORCE:....................................................14 8.7 PROMOTION AND ADVERTISING STRATEGIES:..........................................14 8.8 PRICING: ...............................................................................................................14 9 HUMAN RESOURCE DEPARTMENT:.......................................................................15 9.1 RECRUITMENT AND SELECTION METHOD:.................................................15 9.2 ORIENTATION PROGRAM FOR NEW EMPLOYEES......................................15 9.3 LAYOFF AND EMPLOYEE RETENTION:.........................................................15 9.4 UNION MANAGEMENT RELATION:.................................................................15 10 Change:.........................................................................................................................16 10.1 Leading change:.....................................................................................................16 10.2 Other changes:.......................................................................................................16 10.3 reasons behind MERGER:.....................................................................................17 10.4 problems faced in integration process:..................................................................17 11 Personal Evaluation:.....................................................................................................18
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