Bangladesh University of Professionals

Faculty of Business Studies

Assignment

Course: Strategic Management

Subject: Strategic Overview of ACI Pharmaceuticals Ltd.

Group -5

Submitted by:

Ipshita Fahmin, Ev18017003

Muhtasim Muiz Sondipon, Ev18017011
Md. Shahnewaj Haque, Ev18017025
Abdur Rahman Azad, Ev18017071

Section: A
Assignment- Strategic overview of ACI pharmaceuticals Ltd. based on different strategic analysis
models

Strategic Overview of ACI Pharmaceuticals Ltd.

Strategic overview of ACI

The pharmaceutical industry is one of the largest industries in the country. Bangladesh can meet 97% of
the needs with local production and only 3% is being imported from various countries. However, despite
being almost self-sufficient, Bangladesh is importing 80% of Active Pharmaceutical Ingredients (APIs)
and other raw material used for production of the finished drugs. These APIs and raw material are coming
mainly from countries like China, Korea and India. In this context, the High Commission of India
commissioned a market research in 2017 with the objective to get a complete scenario of the
pharmaceutical market in Bangladesh to examine the potential for Indian companies to enter the
Bangladesh pharmaceuticals market.

It was found that there are 250 companies currently operating in Bangladesh and the size of the
pharmaceutical market is around 1.5 billion in 2016. It is estimated to reach around 3 billion USD by
2025. Currently 54 companies in Bangladesh are exporting pharmaceutical products like antibiotics,
vitamins, antisera, vaccines, toxins and sterile products to 127 countries including United States of
America, Vietnam, Nepal, Singapore, Myanmar, Bhutan, Sri Lanka, Pakistan, Oman, Yemen, Thailand
and some countries in Central Asia and Africa. There is a large market in Europe as well. As a least
developed country (LDC), Bangladesh enjoys a waiver in patent law enforcement and this has helped
Bangladesh support the development of its pharmaceutical industry.

Although Bangladesh is nearly self-sufficient in the area finished drugs, the APIs and raw material are
mainly imported. Currently Bangladesh pharmaceutical industry can source only 20% of the total API
requirement. The estimated market size of the APIs is around 730 million USD which means that
Bangladesh is importing APIs worth of around 584 million USD. It is estimated that demand for APIs
will reach around 1,409 million USD in the year 2025. Most of the raw materials and APIs are imported
from China and India and it was found that approximately 40% of the raw materials come from China
and 30% from India, and the rest come from other countries like Korea and Germany.

Pharma products in Bangladesh tend to experience steady demand and are less sensitive to changes in the
business cycle because of the nature of their usage. Based on Moving Annual Total value, annual sales of
pharmaceutical products stood at BDT 156 billion in FY 2016 (IMS, 2016), representing roughly 0.9%

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the country’s GDP. As one of the fastest growing manufacturing sectors in the country, pharma sector has
recorded a CAGR of 13.5% in the past five years. Presently, the industry meets 98% of the local demand
and exports to more than 125 countries. However, some complicated patented drugs, particularly in
oncology, need to be imported. Two effective policies have accelerated the growth of the sector. One was
the Drug Control Ordinance 1982, which banned foreign companies from selling imported
pharmaceutical products in Bangladesh. The other effective regulatory framework was TRIPS relaxation,
which permitted Bangladesh to reverse engineer patented generic drugs. TRIPS relaxations for
Bangladesh along with other LDCs were extended till December of 2032. In 1982, industry size was only
BDT 1.7 billion which eventually grew ninety times by 2016

Considering the need of the industry, ACI pharmaceuticals has focused on producing critically required
medicine. However, the market share captured by ACI so far is still insignificant.

ACI Pharmaceuticals business had achieved a growth of 25% during the reported year 2016-2017 over
the year 2015. As per IMS report ACI achieved the second highest growth among top 10 companies
leading to market share gain for ACI Pharmaceuticals. This was the result of balanced growth across the
different therapeutic classes. In the anti-ulcer portfolio, leading therapeutic class of Pharmaceutical
Industry, we have gained share. Cardiovascular, Respiratory, and Insulin products performed well and
gained market share. Other notable achievements were in the Anti-infective, Calcium & Vitamin, CNS,
and Lipid regulator portfolio. ACI expanded its product range through the introduction of 14 new
molecules and 17 new SKUs. Among the new launches, introduction of suppository products had the
most impact. ACI had strengthened its presence in the calcium market through the introduction of
effervescent calcium tablets. Both Antiviral and Anti-infective portfolio had been enriched with the
introduction of some modern new molecules. With Biotech products Recogen and Ropenia, ACI
Pharmaceuticals has attained a positive response from the physicians, patients and caregivers in the
nephrology and oncology therapy areas. These two products are now being widely used in the Combined
Military Hospitals (CMHs) and the hospitals of Border Guard Bangladesh (BGB). A wide range of
Biotech and Anti-cancer products are in the pipeline to provide care to patients at an affordable cost
compared to similar imported products.

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There had been considerable accomplishment in the export operation last year. ACI Pharmaceuticals
products have been exported to 3 new countries and have received marketing authorizations of more than
100 products globally. We have been exporting Hexicord to Myanmar - Saving lives of New Born outside
the border. We have delivered 1.4 million units of Hexicord to Myanmar Government last year.

There are 3 growth drivers for ACI

 Shifting Disease Profile, Increasing Healthcare Spending, Growth in Health Service Delivery
Channel
 Development of Backward Linkage and Human Resource to Establish Global Footprint
 Concentrated Market, Dominated by Local Players, Converging Growth Rate of Industry Leaders

Company Overview

Advanced Chemical Industries (ACI) Limited was formed in 1992 when the company named ICI
Bangladesh Manufacturers limited was renamed. The origin of the company goes back to before
independence however, ACI was born when the British multinational company divested their invested in
Bangladesh.

Since its local beginning in 1992, the company had ventured into many areas, Pharmaceuticals being one
of them. With almost three decades of partnering life and engendering hope, ACI is one of the top
pharmaceutical companies in Bangladesh, employing more than 5,000 people all over the country. As a
progressive and forward-thinking company, ACI Pharma is dedicated to improving the health of people
of Bangladesh through introduction of innovative and reliable pharmaceutical products.

ACI’s Mission

ACI's Mission is to enrich the quality of life of the people through responsible application of knowledge,
technology and skills. ACI is committed to the pursuit of excellence through world-class products,
innovative processes and empowered employees, to provide the highest level of satisfaction to our
customers.

ACI’s Vision

 Provide products and services of high and consistent quality, ensuring value for money to our
customers.

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  Endeavour to attain a position of leadership in each category of our businesses.
 Develop our employees by encouraging empowerment and rewarding innovation.
 Promote an environment for learning and personal growth.
 Attain a high level of productivity in all our operations through effective utilization of resources
and adoption of appropriate technology.
 Promote inclusive growth by encouraging and assisting our distributors and suppliers in improving
efficiency.
 Ensure superior return on investment through judicious use of resources and efficient operations,
utilizing our core competencies.

It’s Values

-Quality

-Customer Focus

-Innovation

-Fairness

-Transparency

-Continuous Improvement

ACI pharmaceutical products are exported to 30 countries of 4 continents as claimed by the company.
ACI is enriched with GMP certification from Kenya, Ivory Coast, and Philippines. Our pharmaceuticals
are exported to 30 countries of 4 continents. ACI also has Product Marketing Approval from 15 countries.
ACI is recognized by STC (Save the Children) audit with concluding remarks ‘it can be concluded that
the ACI Limited and company facilities located in Narayanganj, Bangladesh, operates in accordance with
the WHO GMP guidelines’. Although in Bangladesh, the entity is not considered as the leader in the
pharmaceutical industry however due to its sheer strength as a group entity they have been successful to
provide great export revenues for the company. In terms of quality certification, it was the first
pharmaceutical company to receive much coveted certification ISO 9001 followed by EMS 14001. A I
Pharmaceutical believes that its strength is its ability to excel in developing generics and technologically
complex products through an out-and-out, proficient, skillful team in manufacturing, product
development, process re-engineering & quality control department.

At present, ACI formulates & markets a comprehensive range of more than 550 SKUs covering all major
dosage forms of more than 250 Molecules in almost 100 therapeutic classes. ACI has introduced

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sophisticated manufacturing technologies like Biosimilar (biotech) products, insulin, bi-layer tablet,
lyophilized products, hormone products, ophthalmic preparations, novel drug delivery system (NDDS),
large volume parenteral (LVP), small volume parenteral (SVP), suppositories, effervescent formulation,
sustained release dosage formulations, or dispersible products, anesthetics, metered dose inhaler, dry
powder inhaler, nasal spray, etc.

In terms of revenue generation as a SBU unit for ACI, below is an overview

Subsidiaries

 ACI Formulations Limited 8. ACI Motors Limited

 ACI Salt Limited 9. ACI Logistics Limited

 ACI Pure Flour Limited 10. ACI Edible Oils Limited

 ACI Foods Limited 11. ACI HealthCare Limited

 ACI Agrolink Limited 12. ACI Chemicals Limited

 Creative Communication Limited 13. INFOLYTX Bangladesh Limited

 Premiaflex Plastics Limited 14. ACI Biotech Limited

Joint Ventures and Associates

 Tetley ACI (Bangladesh) Limited

 Asian Consumer Care (Pvt.) Limited

 ACI Godrej Agrovet Private Limited

 Stochastic Logic Limited

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Pharmaceutical Sector Overview

Pharmaceutical Industry is rising at a very amazing rate and contributing to the national economy. The
Current industry size with prospective global standards & can emerge as major revenue generating sector
of the country. Bangladesh is self-sufficient in meeting local pharmaceutical product demand and
Bangladesh earned $82.11 mn by exporting pharmaceutical product. This is a great sign of improvement.

Bangladesh domestic market of Pharmaceutical products is increasing over the past few years and
currently the market stood at BDT 142 billion. The demand for good-quality medicine increasing and it
is expecting that local market will reach BDT 160 billion by 2018.

Figure: Pharmaceutical Sector Overview, EBL securities Ltd.

Bangladeshi pharmaceutical companies provide generic product and able to charge premium for its
products. Top 10 companies hold approximately 70% market share. It is highly complicated to enter into
this industry because of huge investment requirement. Square Pharmaceutical is the market leader having
21.15% market share followed Incepta, Beximco, Opsonin and Renata. (Pharmaceutical Sector Overview,
EBL securities LDT.).

Bangladeshi pharmaceutical companies exports is increasing over the time and according to some reports,
current export of pharmaceutical product is $ 82.11 million which is 13.04% higher than previous period.
Bangladesh export pharmaceutical products to 105 countries. Myanmar imports the highest quantity of
medicines worth $13.60 million followed by Sri Lanka with $13.38 million, the Philippines with $6.10
million, Vietnam $5.32 million, Kenya $4.60 million, Afghanistan $4.18 million and Slovenia $3.38
million. Bangladesh pharmaceutical export will cross $ 1 billion landmark within 2018.

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The External Environment of Bangladesh’s Pharmaceutical Industry

Economic Factor

The economic factor in the country affects the development of pharmaceuticals industry. Pharmaceutical
industry of Bangladesh is growing fast and the country’s economic condition is contributing more on this.
Inflation rate of Bangladesh currently is 5.57% which results interest rate 6.5% (Bangladesh Bank). If the
inflation rate increases more than that the value of money will decrease. It means that the value of money
is decreasing and people will have to spend more on medicine which is difficult for people. If the money
losses its power then industry growth will be decrease because firm interest rate also increase. Economic
conditions also affect the countries expenditure pattern. If there is economic crisis in the country or crisis
in the world people will try to spend less in their healthcare. Then the government will try to regulate the
price and pharmaceutical companies will lose their premium income. If the crisis is global than the
countries net export will decrease which will be a great barrier to reach the export goal of Bangladesh.

Sociocultural

The sociocultural factor is very important in the context of Bangladesh. The most of the Bangladeshi
population is young and their immune system is much better than the older population which is
influencing the growth of pharmaceutical industry. We have social and cultural factors like poverty,
malnutrition which are an alarming rate right now. So the pharmaceutical industries need to have a great
concern to address the new trend of problems. Pharmaceutical industry can do a great deal of work in the
healthcare. Pharmaceutical industry can reduce the unemployment rate specially the women in
Bangladesh. Education is shaping the pharmaceutical industry by providing quality employees. As the
people of this country getting health conscious it will pressure the pharmaceutical companies to provide
quality product and invest in research and development.

Global

Pharmaceutical industry is always influenced by global competition. Countries with better global reach
have advantage to succeed in the business. Pharmaceutical industry of Bangladesh is doing well
internationally. Bangladesh exported pharmaceutical products to 105 countries. Myanmar imports the
highest quantity of medicines worth $13.60 million followed by Sri Lanka with $13.38 million, the
Philippines with $6.10 million. Bangladesh set a target to explore 30 new destinations and grab larger
market share. Bangladesh pharmaceutical export will cross $ 1 billion landmark within 2018
(Pharmaceutical Sector Overview, EBL securities LDT.). International law changes the pharmaceutical
industry. For example Bangladesh will enjoy patent free production till 2032. So we don’t need to spend
our money and it will reduce production cost. What Bangladesh needs is that maintain the growth. To
maintain the expected growth rate pharmaceutical companies needs to improve the quality of their

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product. To improve their quality companies needs to invest in research and development to compete
globally. Bangladesh has tariff free export advantage in some and industry needs to capitalize the
advantage.

Technological

Technological factor have always influenced the pharmaceutical industry. Pharmaceutical technologies
changes frequently so it is important to use up to date technologies. In pharmaceutical industry new
technologies or new information creates new opportunities for companies. New technologies change the
way companies communicate with their customer. The use of new technology in the preparation of the
drug is becoming most important and carries out different development work that help the industry for
improvement of medicines Customers

Political/legal

Government always tries to control the manufacturing of medicines and drugs to protect people from
illegal activities. Government tax rate affects the pharmaceutical industry. For example if the government
increase the tax on raw material then pharmaceutical companies will have to charge more money from
the customer. This will create dissatisfaction in the customers. If the government put restriction on foreign
medicine than local pharmaceuticals can grow. Government can fixed the retail price of all medicine in
the pharmaceutical industry. If will affect the profitability of the company. For example if the government
set the maximum retail for medicine then the company will earn less. Most of the companies are publicly
listed so the company will not able to give dividend to their stockholder and invest in research and
development. Ultimately fall of production quality. So the political and legal environment plays essential
role in shaping pharmaceutical industry.

Internal Analysis as per porter’s five forces model

Power of Customer

Bargaining power of customer for pharmaceuticals industry is low in Bangladesh, as customers do not
have any choice but to buy what their doctor prescribe for them. Most of the retailer are scattered and
they buy drugs from those producers who are being loyal to them. NPPA (National Pharmaceuticals
Pricing Authority) tries to control the price of all drugs but they cannot do it in that much effective way
as the market is very competitive.

Power of Supplier

Bargaining power of supplier is low for our pharmaceuticals industry. Pharmaceuticals industry is fully
depend on organic chemicals and chemical industry is very competitive in Bangladesh. So any producer
can shift any time to another supplier to collect their required chemicals.

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Rivalry among Competitors

Rivalry among competitors is very intense and the number of firms in the industry is very high compared
to other industries in Bangladesh. Most of the firms are same in case of their firm size. Some firms use
differentiation strategy to modify their product with general competitors’ product and some use cost
leadership strategy to reach with their product in mass population.

Threat of Substitute Products

Threat of substitute products is very low for the industry, as nothing can be a substitute for medicines.
Biotechnology firms can be a threat for pharmaceuticals industry but most of the pharmaceuticals
producers are collaborating their business with biotechnology firms. This creates the industry to have
almost zero threat of substitute products.

Threat of New Entrants

Threat of new entrants is very high as anyone can invest in this business with fair amount of capital
compared to other production related businesses. Creating a strong distribution network is very easy if
the producer knows his regional customers or retailer very well.

Industry Competition

Competitive analysis focuses on predicting the dynamics of competitors’ actions, responses and
intentions. Pharmaceutical industry of Bangladesh the market is captured by some major pharmaceutical
companies. In Bangladesh top ten companies hold approximately 70% of the total market share. So the
market is controlled by few companies only and that is why the entry barrier is higher. To enter into the
pharmaceutical industry firm needs large amount of capital investment and expertise. According to report
by EBL Security LDT Square Pharmaceutical is the market leader having 18.8% market share and others
are Incepta, Beximco, Opsonin and Renata. We will focus on the future objective of the competitor in the
industry and how to response to competitor.

The major pharmaceuticals companies have a great advantage in the industry. They have a huge variety
of product portfolio and they are expending their product range. By increasing the product range of
product they are trying to maintain their market position. The major pharmaceutical firms like Square,
Incepta, Beximco, Opsonin knows that there is a huge market possibility in the internationally. So they
are trying to expend their reach and go globally. It will help them to invest more in quality product.

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 Power of Suppliers
•Low switching cost
•Local input
•Imported raw
materials

Power of Buyers Industry Competition Barriers to entry

•Low bargaining Highly competitive •Very Low
power Top 5 has more than 50% •Supportive policy
•Price sensitivity is market share •Price Regulation
less •Economy of scale
Lower fixed cost and high
working capital

Threats of
Substitutes
•Low threat
•Biotechnology

Figure: The forces in Bangladeshi Pharmaceuticals market

Strategic Group Mapping

Strategic group mapping is used for the purpose of displaying the competitive positions that rival firms
occupy in the industry. In every industry there are some companies which enjoy stronger market position
than other. Therefore it becomes important to analyze the industry’s competitive structure and identify
the strategic group (cluster of industry rivals that have similar competitive approaches and market
position). Each industry contains one or more than one strategic group depending upon the strategies and
market positions of industry members.

Purpose of strategic group maps:

 Identification of close and distant rivals. This is important to know because close strategic groups
have stronger cross-group competitive rivalry.

 Identification of attractive and unattractive positions of the firms in industry. This attractiveness
depends upon the industry driving forces, prevailing competitive pressures and profit potentials
of different strategic groups.

 Strategic group mapping helps in identifying the strategic group a firm should consider entering.

 It helps in analyzing the type and level of entry barriers the firm will face.

 It also examines the number and type of entry barriers the firm will face.

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Guidelines for constructing strategic group maps:

 There should be no correlation between the variables selected as axes for the map.

 There should be a big difference between the variables selected. This will help to easily identify
the rival’s position in the market place.

 The variables selected should be discrete rather than quantitative or continuous.

 A relative size of each strategic group depends upon the combined sales of the firms in each
strategic group.

 Different competitive variables should be used as axes for the map because there is not necessary
one best map.

Steps in the construction of strategic group maps:

Analyzing the overall industry and identifying those competitive characteristics that differentiate firms in
the industry. Variables selected as axes for the map could be identified during the process of industry
analysis.

Variables selected as axes for the map could be product-line breadth (wide, narrow), price (high, medium,
low), quality (high, medium, low), geographic coverage (local, regional, national, global) etc. Using two-
variable map, have to plot all the firms in the industry. For example price (high, medium, low) can be
taken on x axis whereas product-line breadth (wide, narrow) on Y axis and all the firms can be plotted
accordingly.

All the firms that fall in the same strategy space should be allocated to the same strategic group.

Finally, sketch circles around each strategic group. The size of the circles depends upon the share of a
strategic group in the total industry sales revenue.

There are always competitive pressures and driving forces which adversely affect the firms in strategic
groups. Therefore, some firms may try to shift to a more favorably situated group. This shifting is however
difficult if the entry barriers of the target strategic group are high. An arrow can be attached to the circles
showing the targeted direction of the firms which are trying to change their competitive positions on the
map.

SWOT Analysis of ACI

Strengths

The strength of ACI. lies in its diversified products and dosage forms. ACI has been producing solid
products like tablets and capsules and liquid products like syrup, suspension and solution, as well as
semisolid products like cream and ointment. It is the pioneer company to manufacture and market nasal

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sprays, inhalation aerosols and suppositories in Bangladesh. Kacin is its injectable product. It is a
preparation of Ceftriaxone, which is considered as a breakthrough antibiotic in the history of medicine.
Recently Hexisol is predicted to be one of its leading brands in terms of sales revenue. The company has
lot of diversified products like, Avlosef , Cerox-A, Neotec, Seclo, etc. Its strengths can be analyzed as
under.

1. ACI has skilled scientists/technicians/management personnel at affordable cost leading to

low cost of innovation/ manufacturing/capex costs/ expenditure to run cGMP (current
Good Manufacturing Practice) compliance facilities and high-quality documentation and
process understanding.
2. ACI has well developed chemistry, R & D and manufacturing infrastructure with proven
track record in advanced chemistry capabilities, design of high-tech manufacturing
facilities and regulatory compliance.
3. The healthy domestic market with rising per capita expenditure is another significant
strength enabling achievement of economies of scale. ACI also has a strong marketing &
distribution network.
4. It has Company Strength & product strength, Company strengths effects positively on the
product, & products strength also effects positively on the Company.
5. ACI has highly skilled sales forces & very efficient & wide distribution channels.
6. ACI ranked & held the First position in Pharmaceuticals Industry since 1985, which means
it is in the top for last 28 years,
7. Being in the top for this long time resulted in a very positive impression for all our products
in the minds of the doctors & patients already, it occupies a good position it their minds.
8. The built in positive impression on our products which is in the minds of the doctors &
patients helps us to get a very good response from the market for any product we introduce
in the market.
9. We can say very confidently that the number of sales force of the company, their capability,
Training &selling skills are in better condition & position than any other company in the
industry.
10. ACI follows very transparent marketing activities; there is no misleading or fraud, that’s
why it enjoys a good reputation in the market.
11. ACI maintains high quality standards for its products, that why it enjoys a good position
in the market
12. In production of ACI Omeprazole Injection & DMP quality issues are followed &
maintained properly. The desired AC TC level are ensured 100%

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Weaknesses

The weakness of ACI is the analysis of the internal industry components that are not providing significant
added value or are in need of improvement. The internal components can include physical resources,
human capital or features the company can control. For example, the ACI’s weaknesses could include
high-risk business modeling, disengaged Board of Directors, dated medical equipment, poor branding,
low staff morale or diseconomies of scale. More weakness given below:

1. ACI has introduced the Omeprazole Injection late in the market

2. Omeprazole Injection has introduced already by Incepta & popular before ACI
3. ACI has lost the opportunity to be the first introducer & can’t enjoy the benefits of it.
4. ACI needs to consider the loss of late introduction & work on market considering this
disadvantage.
5. Low investments in innovative R&D continue to be a major weakness of ACI
Pharmaceutical Ltd.
6. ACI’s lack the ability to compete with MNCs for New Drug Discovery, Research and
commercialization of molecules on a worldwide basis due to lack of resources.
7. Strong linkages between industry and academia which are essential for growth of the
industry is lacking in ACI
8. Rapidly increasing costs of skilled manpower such as scientists/ regulatory compliance
personnel / pharmaceutical lawyers/ international business development personnel is
pushing up the cost of innovation.
9. Sales and marketing knowledge is inadequate due to lack of understanding of international
Pharmaceutical marketing/pricing practices and market environment in various countries.
10. Inadequate manufacturing practices.

Opportunities

The opportunity of ACI’s is the analysis of the external industry components that provide a chance for
the company to grow in some capacity or gain a competitive edge. The external components should be
environmental factors or aspects outside the company’s control, yet reflective of the business
marketplace. It can be analyzed as under.

1. In the market, the number of Antiulcer patients is increasing, when the number of patients
increases the possibility of a good return from the required drug increases.
2. On that perspective we are seeing a good opportunity for our Omeprazole Injection since
the market is growing.
3. Incredible export potential

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 4. New innovative therapeutic products.
5. Drug delivery system management.
6. Income is increasing day by day.
7. Clinical trials & research
8. Due to the cost advantage in contract manufacturing & Research multi-national companies
find it compelling to shift their production bases to countries offering such cost advantage.
9. Licensing deals with MNCs for NCEs (New Chemical Entities) and NDDS (New Drug
Delivery Systems) offer new opportunities for ACI Marketing alliances for MNC products
in domestic and international market is another emerging opportunity.There is a possibility
of greater returns from other countries of the world by exporting.

Threats

The threats of the pharmaceutical industry is the analysis of the external industry components that could
create an opportunity for the ACI to decline, atrophy or lose some competitive edge. The external
components should be environmental factors or aspects outside the industry’ scontrol, yet reflective of
the business marketplace. For example, the pharmaceutical industry’s threats could include increased
government regulation, a declining economy, increasing research and development (R&D) costs or a
decrease in the global population. The threats of ACI are discussed below.

1. Some other companies are planning or in process to introduce Omeprazole Injection in the market.
2. When they will introduce, they will through a competition in the market as well. ACI needs to
consider the competition in planning of their marketing strategies to respond to this threat & fight
back.
3. R&D efforts of Bangladeshi pharmaceutical companies are hampered by lack of enabling
regulatory requirement.
4. Export effort is hampered by procedural hurdles in Bangladesh as well as non-tariff barriers
imposed abroad.
5. Lowering of tariff protection has increased competition in domestic markets resulting in erosion
of profitability.
6. Mergers and acquisitions by other companies may completely change condition of the pharma
market.
7. Small number of discoveries.
8. Competition from MNCs.
9. Transformation of process patent to product patent (TRIPS).
10. Outdated Sales and marketing methods.
11. Limited knowledge and experience base.

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 12. Pricing and reimbursement level could restrict use.

BCG matrix is a framework created by Boston Consulting Group to evaluate the strategic position of the
business brand portfolio and its potential. It classifies business portfolio into four categories based on
industry attractiveness (growth rate of that industry) and competitive position (relative market share).
These two dimensions reveal likely profitability of the business portfolio in terms of cash needed to
support that unit and cash generated by it. The general purpose of the analysis is to understand, ACI should
invest in this sector or not and growth is possible in this sector or not.

In our paper we showed ACI is in the Star domain. According to the data of 2016-17 stock market, ACI
has captured the highest market share in pharmaceutical industry what ACI has not ever achieve. It
signifies the dominant position of ACI in stock market. Besides in 2013, the national market growth of
pharmaceutical industry is 11.36% whereas ACI’s growth rate is 4.64%.

A recent study by LankaBangla Investment Ltd revealed that local players dominate Bangladesh's
pharmaceutical market. The top ten companies hold 68.49% of market share, while the top twenty
companies hold 86.33%.

Square Pharmaceuticals holds 17.73% of market share, while Incepta holds 10.21%, Beximco 8.39%,
Opsonin 5.54%, Renata 4.97%, Healhtcare Pharma 4.57%, ACI 4.43%, Aristopharma 4.38%, Eskayef
4.36%, and Acme holds 3.91%, according to the study.

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Now we can see that ACI doing very well in this market and it also profitable brands and providing cash
as much as possible. Though their market share is not very high so we think that ACI goes to Cash Cow.
As we can see from above analysis that the pharmaceutical industry is booming so there is lots of
opportunity and possibility to become star.

Recommendation

Although ACI Pharmaceuticals is operating successfully in the market, there we have got some
recommendation for them-

 They should invest more in R&D sector.

 They should be more careful in terms of pricing of their product.
 They can go for backward or forward integration support to reduce production and
distribution cost.
 They should more focus on customer oriented product
 They need to Emphasize on high technology

Conclusion

Advanced Chemical Industries (ACI) Limited was formed in 1992 though the origin of the company goes
back to before independence however, ACI was born when the British multinational company divested
their invested in Bangladesh.

Since its local beginning in 1992, the pharmaceuticals section flourished the most. Now ACI is one of the
top pharmaceutical companies in Bangladesh. In the recent years the company has always shown growth
more than the industry. In last year also ACI’s growth was 10 % which is more than overall pharma
sector’s growth.

Company Name Value (Tk.) Share (%) Growth (%)

Rank
Total Pharma Market 198,926,046,015 100.00 8.04
1 SQUARE 33,805,865,463 16.99 1.69
2 INCEPTA PHARMA 21,114,668,550 10.61 11.85
3 BEXIMCO 16,588,535,183 8.34 7.62
4 OPSONIN PHARMA 10,540,322,109 5.30 2.84
5 RENATA 10,234,723,309 5.14 11.58
6 HEALTHCARE PHARMA 9,755,868,955 4.90 22.64
7 A.C.I. 9,010,868,653 4.53 10.71
8 ESKAYEF 8,702,201,576 4.37 7.35
9 ARISTOPHARMA 8,345,124,645 4.20 3.00
10 ACME 7,271,555,239 3.66 0.93
Figure: IMS report of Q4 2018

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Though Bangladeshi drug industry to manufacture drugs is well established. Many pharmaceutical
companies trying their best to conquer the markets. ACI’s pharmaceutical section can grow more if they
start to produce their own raw material. Which will help ACI to expand their business globally. It will
be helpful for both the company and the industry.

References

 https://www.aci-bd.com/
 IMS MAT Report
 http://www.squarepharma.com.bd/
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