Competitive Analysis of Abbott Laboratories
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Abbott Laboratories (Pakistan) is a pharmaceutical company founded in 1888 that has been operating in Pakistan since 1948. It has over 1,500 employees and manufacturing facilities in Karachi. The company produces pharmaceuticals, nutritional products, diagnostics, and medical devices. Abbott's main competitors in Pakistan include GSK, Searle Pakistan, Sanofi Aventis, Ferozsons Labs, and Pfizer. An analysis of Abbott's strengths, weaknesses, opportunities, and threats was conducted, as well as financial analysis showing steady growth from 2012-2017. Recommendations included focusing on products with fewer side effects, reducing employee turnover, engaging with the government, and adopting new technologies.
Competitive Analysis of Abbott Laboratories
- 3. Contents Industry & Company Profile and Key People Competitors IFE and EFE CPM Portor’s Five Forces Financial Analysis Recommendations & Conclusion
- 4. Industry Overview • Pakistan Pharmaceutical Manufacturers’ Association • In 1947, hardly any pharma industry. • Now, 759 pharma manufacturing units + 25 multinational brands. • Approx. meet 70% country demand. • 2007 pharma’s sold were US$1.4bn. • Despite good growth in last decade, about half of the population have no access to modern medicine. • Need more work from Govt. and Industry Stakeholders. Pharma Link
- 5. Company Profile Location Head Office Opposite Radio Pakistan Transmission Center HYD Road, Karachi Products 1. Pharmaceuticals 2. Nutritional 3. Diagnostics 4. Medical Devices Financial Facts Revenue ▲PKR 26,088,233 (in ‘000) 2017 Total assets ▲PKR 19,236,259 (in ‘000) 2017 Board of Directors Munir A. Shaikh (Chairman) Syed Anis Ahmed (CEO) Jamshed Azhar (CFO) Rana A. Latif (Dir. Operations)
- 7. Company Profile Started in 1888 by Dr. Wallace C. Abbott 1948 started in Pakistan Now, Business in 130+ countries Employees 1500 Manufacturing Facilities at Landhi and Korangi, Karachi All top Pharma Companies are competitors 2nd largest market share Share Value = PKR 665.70 (PKR 5 Δ)
- 9. Company Profile • Following are the main distributes of Abbott: • Premier Agency Muslimabad, Karachi • Babar Medicine, Lahore • Nadeem Traders, Peshawar. • Baloch Enterprise, Multan • D.S Pharma, Rawalpindi.
- 10. Top Competitors Competitors: GLAXOSMITHKLINE SEARLE PAKISTAN SANOFI AVENTIS FEROZESONS LABS PFIZER GETZ
- 11. GSK is leading Pharma company of Pakistan and world’s 2nd largest company. It was formed in 2001 after the merger of SmithKline, Beecham (Pakistan) Limited and Glaxo Wellcome (Pakistan) Limited. The present employees are about 2,000 and manages 150 brands. The SEARLE Company Ltd (TSCL) incorporated in Pakistan in 1965 as a subsidiary of G.D. Searle & Co., U.S.A. Today, Searle is ranked as 4th leading pharmaceutical company in Pakistan. TSCL is manufacturing organization of branded generics and providing best research products in services of mankind. Sanofi-aventis Pakistan limited ("Sanofi") is a patient-centric company with over 1000 employees working every day with the commitment to improve health and wellness across the country. Sanofi ranks amongst the top ten pharmaceutical firms in Pakistan.
- 12. Ferozsons Laboratories founded in 1960. Ferozsons has market leader brands in the areas of gastroenterology, hepatology, cardiology and oncology, with an emerging presence in endocrinology as well as mother and child health the diabetes spa. Pfizer Pakistan has been working for the health and well-being of people in Pakistan since 1959. Pfizer’s Pakistan owns the livelihood of 1000 people. The Pakistan affiliate is also responsible for managing distribution networks in Afghanistan. Getz Pharma is a member of the Getz Group of Companies, founded in 1995 by Getz Brothers and Co. Inc. It employs more than 5,700 highly qualified people worldwide and has operations in South Asia, Central Asia, South-East Asia, Asia-Pacific, the Middle East and Africa
- 13. Vision and Mission Vision: • To be the most admired healthcare company in Pakistan. Mission: • To deliver consistently superior products and services which contribute significantly to improve the quality of life of consumers.
- 14. Mission Statement Evaluation Items Yes/No Customers Yes Products Yes Markets No Technology No Concern for Survival, Growth, and Profitability Yes Philosophy Yes Self-Concept No Concern for Public Image No Concern for Employees No
- 15. Proposed Mission Mission: • To deliver consistently superior quality pharmaceutical and healthcare products and services produced under high equipment facilities which contribute significantly to improve the quality life of consumers and protection of environment.
- 16. Mission Statement Evaluation Items Yes/No Customers Yes Products Yes Markets No Technology Yes Concern for Survival, Growth, and Profitability Yes Philosophy Yes Self-Concept No Concern for Public Image Yes Concern for Employees No
- 17. Internal Strengths And Weaknesses Strengths: 1. Strong Brand Reputation in Pharma Industry 2. Global Presence 3. Strategic Alliances 4. Diversified variety of Products 5. Experience of 100+ years in Pharma Industry 6. Innovation Leader Weaknesses: 1. Labor Turnover 2. Recent Expiring Patents 3. Declining Marketing Share 4. Less Focus on Marketing
- 18. Internal Factor Evaluation (IFE) Strengths Weight Rating Weighted Average Strong Brand Reputation in Pharma Industry 0.2 3 0.6 Global Presence 0.1 2 0.2 Strategic Alliances 0.2 3 0.6 Diversified variety of Products 0.1 3 0.3 Experience of 100+ years in Pharma Industry 0.05 1 0.05 Innovation Leader 0.1 3 0.3 Weaknesses Labor Turnover 0.07 4 0.28 Recent Expiring Patents 0.06 4 0.24 Declining Marketing Share 0.07 3 0.21 Less Focus on Marketing 0.05 2 0.1 Total 1 2.88
- 19. External Opportunities And Threats Opportunities: 1. Expected Growth in Industry 2. Increase in requirement of “Quality of Life” 3. Support From Govt. 4. Increase in consumption of Customers 5. Increasing Technology in Health Care Products Threats: 1. Entrance of New Multinational Firm 2. Exchange Rate Fluctuation 3. Strict Rules and Regulations 4. Threat of Substitutes like Herbal, and Homeopathic products. 5. Increasing issues of Copy
- 20. External Factor Evaluation (EFE) Opportunities Weight Rating Wt. Av. Expected Growth in Industry 0.05 2 0.1 Increase in requirement of “Quality of Life” 0.1 3 0.3 Support From Govt. 0.05 2 0.1 Increase in consumption of Customers 0.1 3 0.3 Increasing Technology in Health Care Products 0.2 4 0.8 Threats Entrance of New Multinational Firm 0.15 3 0.45 Exchange Rate Fluctuation 0.12 3 0.36 Strict Rules and Regulations 0.13 3 0.39 Threat of Substitutes, i.e., Herbal, and Homeopathic products. 0.07 2 0.14 Increasing issues of Copy 0.03 2 0.06 Total 1 3
- 22. Competitive Profile Matric (CPM) ABBOTT GSK SEARLE PAKISTAN Critical Success Factors Wt. Rating Score Rating Score Rating Score Product Quality 0.12 4 0.48 4 0.48 4 0.48 Price Competition 0.08 3 0.24 3 0.24 3 0.24 Management 0.12 2 0.24 3 0.36 3 0.36 Financial Position 0.08 3 0.24 3 0.24 2 0.16 Customer Loyalty 0.1 4 0.4 4 0.4 3 0.3 Market Share 0.08 3 0.24 3 0.24 2 0.16 Global Expansion 0.08 3 0.24 4 0.32 4 0.32 Research & Development 0.17 3 0.51 4 0.68 3 0.51 Brand 0.1 3 0.3 4 0.4 3 0.3 Employee Turnover 0.07 2 0.14 2 0.14 2 0.14 Total 1 3.03 3.5 2.97
- 23. TOWS Analysis • Threat • Opportunities • Weaknesses • Strength
- 24. Strengths Strong Brand Reputation in Pharma Industry 1.Global Presence 2.Strategic Alliances 3.Diversified variety of Products 4.Experience of 100+ years in Pharma Industry 5.Innovation Leader Weaknesses Labor Turnover 1.Recent Expiring Patents 2.Declining Marketing Share 3.Less Focus on Marketing Threat Entrance of New Multinational Firms Exchange Rate Fluctuation 1.Strict Rules & Regulations 2.Threat of Substitutes 3.Increasing issues of Copy Opportunities Expected Growth in Industry Increase in requirement of “Quality of Life” Support From Govt. Increase in consumption of Customers Increasing Technology in Health Care Products SO STRATEGIES 1. Through Strategic Alliance carter the growth in industry (S3, O1) 2. Expand the distribution to access the demand for modern medicines (S3, O4, O5). WO STRATEGIES 1. Social sites can be used for promotion & marketing. (W3, W4, O4, O5). WT STRATEGIES 1. Focus on Marketing practices will reduce the threat of substitute and issues of copy as customers will find the actual products. W4, T4, T5). 2. Reissue the expired patents with modifications to overcome the threat of copying. (W2, T5). ST STRATEGIES 1. Focus on Innovation and using strategic alliances will reduce the threat of entrance of new firms. (S3, S6, T1). 2. Develop the products that have minimal side effects to face the competition from herbal and homeopathic products. (S1, S5, S6, T3, T4) TOWSAnalysis
- 25. Portor’s 5 Force Analysis
- 26. Portor’s 5 Force Analysis EXISTING MARKET SCENARIO (High) Large Industry Size Strong Competitors Rapid Growth in Industry SUPPLIERS (High) High Level of Competition among Suppliers CUSTOMERS (Low) Limited Choices Product is important Large Number of Buyers THREATS (NEW ENTRANTS) (Low) Brand name is important High Capital and Advance Technologies are Required THREAT OF SUBSTITUTE PRODUCTS (Moderate) Substitute products are inferior and slow in reaction High cost of switching
- 28. Financial Highlights Rupees in Million Total Assets 19,236.30 Total Revenues 26,088.20 Total Liabilities 4,880.40 Shareholders' Equity 14,355.80 Earnings Per Share(PKR) 42.95 Total Assets 17,645.20 Total Revenues 23,387.90 Total Liabilities 3,051.90 Shareholders' Equity 14,593.20 Earnings Per Share(PKR) 41.05 Total Assets 16,488.30 Total Revenues 21,140.40 Total Liabilities 3,539.00 Shareholders' Equity 12,949.20 Earnings Per Share(PKR) 36.56
- 29. Excel Link 19236.3 17645.2 16488.3 13765.6 11168 9329.9 26088.2 23387.9 21140.4 19692.4 17217.3 15216.3 4880.4 3051.9 3539 2894 2420.7 2622.5 0 5000 10000 15000 20000 25000 30000 2017 2016 2015 2014 2013 2012 Total Assets Total Revenues Total Liabilities
- 30. Excel Link 14355.8 14593.2 12949.2 10871.6 8747.3 6707.4 0 2000 4000 6000 8000 10000 12000 14000 16000 2017 2016 2015 2014 2013 2012 Shareholders' Equity 42.95 41.05 36.56 28.72 25.83 21.35 0 5 10 15 20 25 30 35 40 45 50 2017 2016 2015 2014 2013 2012 EPS (PKR)
- 31. Ratios
- 32. 2017 2016 2015 2014 ROE 29.05 29.2 31.11 28.71 ROA 22.8 23.57 23.71 22.59 Gross Margin 38.67 40.05 38.86 38.34 0 5 10 15 20 25 30 35 40 45 INMILLIONSOFPKREXCEPTPERSHARE Ratios
- 33. 2017 2016 2015 2014 Net Income Margin (%) 16.1 17.2 16.9 14.3 Growth (%) 4.6 12.3 27.3 11.2 0 5 10 15 20 25 30 INPERCENTAGE Ratios
- 35. Recommendations • Company should come up with the products that have minimal side effects to stay in the market and reduce the issue of copy. • For reducing the employees turnover, company must focus on the proper recruitment and Selection process. • Government should focus on the current condition of pharmaceutical and health care companies to ensure the health of public. • Company should focus on the technological change, i.e., innovative technologies, online presence and e-commerce.